To help or not to help two struggling groups: soybean farmers and low-income families
Farmers who grow soybeans and families that are at the lower end of the income scale may not seem to be groups that would have much in common in most situations.
Except that both will be severely affected financially by actions being taken by the federal government right now.
For farmers, this is the time of year when much of the annual soybean crop, the largest cash crop in most Midwestern states, is harvested. Usually, this means that farmers are not far away from a nice payday, one that finally delivers a profit after months of investing to make that happen. This year, however, tariffs, described by the President as “the most beautiful word in the dictionary,” have cancelled the payday.
For low-income families in which wage earners do not receive health insurance as a fringe benefit, it is the time of year when they learn what coverage under the Affordable Care Act (ACA) will cost for the year ahead. In recent years, this news has gone mostly unnoticed because there has been little change from year to year. This year, millions of families are beginning to see startling numbers as a result of the President’s “big beautiful bill,” which intentionally omitted full coverage for the ACA.
This year, the Federal government, under the firm hand of the President, has decided that it is time for both farmers and families – specifically soybean farmers and low-income families – to suffer financially.
Tariffs
New U.S. tariffs on imports this year have caused China to retaliate by cutting its purchase of U.S. soybeans dramatically. China spent $12.6 billion buying U.S. soybeans in 2024, more than any other country by a wide margin. This year, it cut its spending during the first five months of the year to about half of what it had spent to buy U.S. soybeans the prior year. Then, U.S. soybean revenue from China dropped to zero, where it remains today.
Now, with the fall harvest underway, U.S. soybean farmers are facing a triple whammy.
1) China, which bought about half the U.S. soybean crop last year, no longer buys any soybeans from the U.S.
2) Soybean prices have dropped, from an annual average of just over $11 a bushel in Iowa in 2024 to a range of about $9.30 to $9.90 a bushel this month.
3) Operating costs for farmers have increased significantly this year as tariffs produced retaliatory price increases for fertilizer and farm equipment, much of which comes from China.
The bottom line is that many soybean farmers in the U.S. are facing the possibility of losing money on their soybean crop this year.
Footnote: The tariff strategy also has resulted in price increases for many products beyond the world of soybean farming and has created financial hardships for people in a wide range of businesses.
Families without employer-provided health insurance
For families in the lower range of the income spectrum the disturbing economic news of the moment relates to the price of health insurance for the coming year.
A family of four with two adults aged 28 and two small children, and with total annual income of $64,000, will be notified by November 1 that its cost of health insurance under the Affordable Care Act will increase from $1,217 a year to $4,139 a year, the Iowa Insurance Division reports.
A couple in their mid 50s in Iowa with combined income of $95,000 a year would face an increase in the cost of health insurance of about $1,000 a month, from $7,818 a year to $19,905 a year, according to the Insurance Division.
The increases are expected to result in many families being forced to drop their health insurance entirely.
The increases stem from the fact that ACA funding was increased to its present level in 2021. Now, that increased amount is scheduled to expire at the end of the year. The federal government, thus far, has declined to renew this portion of ACA funding for another year. Insurance rates, meanwhile, are climbing.
About 136,000 people in Iowa would be affected.
The decision on whether to continue the full ACA funding for another year has become the sticking point in the current shutdown of the federal government. Neither party can reach the votes by itself to enact a Congressional spending resolution for 2026. Republicans, led by the President, do not want to spend the additional money needed to extend the ACA for another year at its present level. The Democrats will not vote for a spending resolution that does not include the additional funding.
A surprising irony
The irony here is that the amount of money needed for this portion of ACA funding is $30 billion for 2026, which is, well, peanuts, in terms of how the federal government spends money.
The $30 billion would represent less than 43 ten-thousandths of 1 percent of the $7 trillion cost of operating the federal government for one year.
That would be the equivalent of about $35 for a family with an income of $80,000 a year.
Moreover, the President appeared to pull at least $20 billion and possibly as much as $40 billion out of nowhere this past week as a possible gift to the government of Argentina, which has got itself into a financial bind. There was no line item in the federal budget for that.
He just wanted to do it.
Instead, he could have spent just $30 billion and kept the money in the U.S. to help American citizens who have trouble making ends meet in an economy that is running at an annual inflation rate of 2.9 percent.
Bonus: The federal government would have reopened.
As for the soybean farmers, the President has talked about easing their plight by sharing with farmers a portion of the revenue the U.S. government has received from the new tariffs. But so far, this has not moved beyond the talking stage.
The opposition view of the above issues
The President and the Republicans in Congress have different views on the subjects addressed in this column.
The President believes that the tariffs are a valuable negotiation and revenue tool for the U.S. that are worth whatever the cost to individuals and businesses may be.
He believes that the federal government should not reopen until the Democrats agree to support a funding package that reduces ACA funding from its current level to its pre-2021 level, a cut of about $30 billion.
The Republican Party appears willing to support his wishes regarding these issues. This will result in millions of people being hurt financially in a significant way while the federal government saves $30 billion in ACA funding and retains its current tariff strategy.
Each of us will have to decide which side we are on.
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Thank you, Jack.
Another excellent column.