Yeutter Will Be Bush Secretary of Agriculture

President-elect George Bush Wednesday tapped U.S. Trade Representative Clayton K. Yeutter to serve as secretary of agriculture and--in one of the most specific policy statements since the election--indicated that he is willing to risk a trade war with U.S. allies to boost farm exports and potentially reduce the federal deficit.

Bush’s remarks after appointing Yeutter were a rare departure from his consistent policy of avoiding specifics about the policies he will follow after he is inaugurated next month. His statements were the clearest indication yet of one of the approaches he will use in tackling the deficit, which looms as his single biggest domestic policy problem.

Yeutter, 58, a farmer from Nebraska and the former head of the Chicago Mercantile Exchange, is Bush’s sixth Cabinet choice and the fifth appointee who has served in the Reagan Administration.

Although that record appears to contradict Bush’s repeated statements that he plans to bring in “fresh faces,” Bush defended himself Wednesday, noting that some of the familiar faces he has named to the Cabinet hold new jobs and that newer names will surface as he completes his selections.

Yeutter’s “wide knowledge of the issues and obviously demonstrated skill and broad experience, make him, quite simply, the best man for this very important job,” he said, adding that the appointment “will send a significant message to our trading partners abroad.”

The appointment drew quick praise on Capitol Hill, indicating that Yeutter faces a swift and easy confirmation by the Senate.

“He has international credibility and the respect of most farmers, farm groups and members of Congress from both parties,” said Sen. Bob Dole (R-Kan.), the Senate Republican leader. Democratic Sen. Max Baucus praised Yeutter’s role in fighting Japanese restrictions on U.S. beef exports, a major concern in Baucus’ home state of Montana. And California Republican Sen. Pete Wilson called the appointment “a shot that will be heard around the world” by U.S. trading partners.

The choice “demonstrates without doubt that the Bush Administration will carry out a revolution against protectionism, especially in farm markets where unfair barriers to free trade abound,” said Wilson, a member of the Senate Agriculture Committee. California is the nation’s largest source of agricultural exports.

Offer Hope for Trims

Yeutter, for his part, said that it had not been easy for Bush to talk him out of plans to take a lucrative job in the private sector but that Bush “did convince me that it was important to have someone of my general background in this position at this particular point in the nation’s history.”

The background Yeutter referred to is his 3 1/2 years as U.S. trade representative, where conflicts over agricultural policy have dominated his tenure. In appointing Yeutter, Bush made clear that a drive to increase U.S. food exports will be a major priority as he searches for ways to improve both the U.S. trade balance, where agriculture already is a significant bright spot, and the federal budget deficit, where farm programs are one of the few potential sources of significant spending cuts.

Farm payments are dwarfed by the biggest spending categories--defense, Social Security, Medicare and Medicaid and interest payments on the national debt--which together make up 80% of the $1-trillion federal budget. But unlike those four categories, which seem all but impossible to cut, farm payments, expected to be about $14.5 billion next year, hold out hope for reductions.

Cutting the payments directly would be politically difficult and Bush has shied away from that step both during the campaign and since. “I will not be proposing substantial cuts,” he said at a press conference after announcing Yeutter’s appointment. “I don’t believe that we are going to balance this budget eventually on the backs of the farmers.”

Instead, Bush hopes that by aggressively pushing exports, the government can increase farmers’ income. That, in turn, would ease the way for “lower supports and lower subsidies, that, I think, we should aspire to.”

The goal, however, is not that simple. Increasing U.S. farm exports threatens the income of farmers in other nations, a reality that already has led to battles with U.S. allies around the globe. And in the short run, a trade war with allies over farm exports could require more subsidies, not less, and actually increase the deficit.

“The signal” of Yeutter’s appointment is that “we want to do business,” Bush said. “We’re not anticipating any trade war. We’re dealing with friends; we’re dealing with allies. . . . But we’re entitled to forcefully send out the message that we need more access, that our farm products should have fair access.” While saying that he hopes the trade disputes can be resolved amicably, he warned that “there have been times in the past where there have been rifle shots fired” and “we are very serious about working the agricultural sector of our trade.”

U.S. allies are equally serious about protecting the incomes of their farmers, who often wield considerable political power. In Japan, imports of beef and rice have been contentious issues for years. In South Korea, farmers tossing manure have demonstrated in front of the U.S. Embassy to protest U.S. attempts to increase sales of beef in that country. And in Europe, the 12-nation European Community devotes a huge percentage of its budget to subsidizing 11 million often economically inefficient farmers from Portugal to Denmark.

Staff writer William J. Eaton contributed to this story.