Washington, D.C. – The Council of Citizens Against Government Waste (CCAGW) today

commended the House Appropriations Committee for not including any amendment to the FY2002 Agriculture Appropriations Act that would extend or expand dairy compacts.

“CCAGW has contended for years that dairy compacts have long-term negative consequences for consumers and taxpayers,” CCAGW President Tom Schatz said.  “By artificially raising prices, dairy compacts impose a regressive tax on a basic food, disproportionately affecting children and the poor.  This ‘milk tax’ makes milk less affordable, and, at the same time, encourages excess production.”

“Excess milk production ends up costing taxpayers, as evidenced by last year’s purchase of over $500 million worth of surplus milk powder by the federal government,” Schatz also said.  “Higher milk prices set by dairy compacts hit Americans twice, once at the store in a hidden tax, and again in higher tax burdens to cover rising government costs.”

The cost of extending and expanding compacts would dwarf the $100 million milk tax that has been imposed on consumers in the six Northeast Compact states.  While the New England region produces less than 3 percent of the nation’s milk supply, expanding the Northeast Compact and creating a Southern Compact could bring almost half of the nation’s milk supply and two-thirds of the nation’s consumers under the power of milk-pricing cartels.  The milk tax for this expanded dairy compact region could amount to as much as $2 billion annually.

“CCAGW hopes that the fact that compact legislation was not added to the Agriculture Appropriations Act is an indication that a growing number of members of congress are coming down on the side of taxpayers and consumers and concluding that dairy compacts are unacceptable and bad policy,” Schatz added. 

“The evidence is overwhelming.  It is time to end this regressive milk tax on Americans.  While this lack of action is welcome news for taxpayers and consumers, CCAGW will continue to oppose any future legislative attempts to extend or expand dairy compacts.”

CCAGW is the lobbying arm of Citizens Against Government Waste, the nation’s largest taxpayer advocacy group with over a million members and supporters nationwide.  It is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.