President Obama last month quietly signed into law a spending bill that restores the American horse-slaughter industry, just a few months after a government investigation said the ban on slaughtering was backfiring.

The domestic ban didn’t end horse slaughter but instead shifted the site of butchery to Mexico and Canada - which meant increased abuse or neglect as the horses were shipped out of the country and beyond the reach of U.S. law.

The ban had been imposed in 2006 when Congress defunded the government’s ability to inspect plants that butchered horses for consumption. Without inspections, the meat couldn’t be sold, and the industry withered.

But the Agriculture spending bill Mr. Obama signed the week before Thanksgiving dropped the prohibition on inspections, and the administration said it now stands ready to conduct them should anyone open a horse-slaughter plant.

“While we have a long way to go, responsible processing represents a vital first step in reversing the unintended consequences to blame for the dismal state of neglected horses and their frustrated caregivers across our country,” said Rep. Adrian Smith, a Nebraska Republican who fought for the change. “Reinstating a humane, accountable and legal management tool is good for horses, good for owners and is good policy.”

All sides agreed that the backdoor ban was a failure.

A June report by the Government Accountability Office, Congress‘ chief investigative branch, said the ban depressed prices for horses in the U.S. and led to a surge in reports of neglect or abuse as owners of older horses had no way of disposing of them, short of selling them to “foreign slaughtering facilities where U.S. humane slaughtering protections do not apply.”

In unusually blunt language, GAO suggested that Congress and Mr. Obama revisit the ban.

The options facing Congress were to further ban the export of horses for slaughter or lift the domestic slaughter ban. Congress chose the latter.

The move got a tepid stamp of approval from People for the Ethical Treatment of Animals, which said it had always been worried about the way Congress went about its initial ban. PETA said it predicted that horses would be shipped to foreign slaughterhouses.

“A law doesn’t change what’s in people’s hearts, and if business people view horses as commodities, ignoring their sensitive natures in favor of the few dollars that their flesh might bring, the horses were sunk from the start,” said David Perle, a spokesman for the group. “To reduce suffering, there should be a ban on the export of live horses, even if that means opening slaughterhouses in the U.S. again. But the better option is to ban slaughter in the U.S. and ban the export of live horses so that no one is slaughtering America’s horses.”

Horse meat is regularly used for consumption by circuses and zoos, and it is now sent to countries in the Eastern Hemisphere where it is an accepted food. But slaughter has been a prickly issue in the U.S.

A bill to ban horse slaughter and export of horses for slaughter has been introduced in the House and Senate, and the Humane Society of the United States said it would redouble its efforts to try to enact that legislation.

In the meantime, the Agriculture Department’s Food Safety and Inspection Service said there are no horse slaughterhouses operating in the U.S. that produce meat for human consumption, but the agency would be ready for inspections if a facility opens.

Another factor is that many states have laws banning horse slaughter.

Michael Markarian, who oversees the Humane Society Legislative Fund, which lobbies for animal protections, said any state that allows a horse-slaughter plant to open will face pressure.

“People will not be happy about their community potentially bringing in one of these plants,” he said. “Americans don’t eat horses, and don’t want them butchered and shrink-wrapped and sent to France or Japan as a delicacy.”

In 2010, about 138,000 horses were exported for slaughter, and another 30,000 horses were shipped for other purposes, though some of those likely were sent to feedlots to be fattened for slaughter.

Congress never banned horse slaughter outright, but gave inspection powers to the Agriculture Department in 1996. In 2006, it voted to halt federal inspections, which essentially ended the industry.

This year, the House version of the Agriculture spending bill maintained the slaughter-ban language, but the Senate did not. When the two chambers reconciled their bills, the language was not in the final version.

Mr. Obama signed the spending bill by autopen on Nov. 18. He was traveling in Asia at the time the bill was presented to him, so he used the automated signature machine for the second time in his presidency.

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