Can I get a citation for any of this? It was my understanding that the USDA allows cattle to be fed "cage lining" which is chicken feathers, poop and feed taken from the bottom of chicken cages. The chicken feed, in turn, contains cattle meat and trimmings, thus making your "side of scrapie" scenario a small but significant possibility.
In other words, what makes you think the USDA is not beholden to the commercial interests that it regulates, like every other government agency?
Look at the difference in Salmonella rates between the US and France for instance.
And yes, regulatory capture is an issue with the FDA, that has periodically resulted in scandals; but the meatpacking industry knows that without some obvious checks on their hygiene their industry as a whole is worse off. If one plant cuts too many corners and starts shipping moldy meat, the entire industries sales suffer; so it's in the meat companies interest to have someone policing defectors from good practices.
In other words, what makes you think the USDA is not beholden to the commercial interests that it regulates, like every other government agency?