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79 to 14: Senate Passes Farm Bill
Dan Morgan, writing in today’s Washington Post, reported that, “Ending a six-week impasse, the Senate yesterday approved a $286 billion farm bill that would authorize significant new spending for farm programs, food stamps and conservation but would make only modest changes in the nation’s traditional agricultural subsidy system.
“The 79 to 14 vote came after Southern lawmakers used a procedural maneuver to prevent the approval of tighter limits on subsidy payments to large commercial growers of rice and cotton. The savings from the change would have gone to anti-hunger programs, the protection of fragile grasslands and the settlement of lawsuits filed by black farmers alleging discrimination in government farm programs.
“Despite yesterday’s lopsided vote, the measure still faces serious hurdles. House and Senate negotiators must agree on a compromise version. And the White House, citing inadequate reforms and the use of ‘$20 billion of budget gimmicks,’ has threatened to veto the bill, as well as a House version that passed in July.
“Acting Agriculture Secretary Chuck Conner said yesterday that he was ‘disappointed’ with the Senate measure. ‘This bill has a tough road ahead of it,’ he said.”
(Note: Sec. Conner’s complete statement regarding the Senate-passed Farm Bill is available here).
Mr. Morgan indicated that, “Although the amendment, proposed by Sen. Amy Klobuchar (D-Minn.), was backed by a 49 to 48 majority, it was rejected under rules requiring 60 votes for passage. Another amendment that would have limited federal farm payments to $250,000, down from the current $360,000, met a similar fate.
“A key player in blocking the changes was a Democrat, Sen. Blanche Lincoln (Ark.), who threatened to hold up consideration of the entire farm bill unless Democratic leaders agreed to the 60-vote requirement. Rather than face the embarrassment of a Democratic filibuster, Democratic leaders agreed to her terms.”
In conclusion, The Post article stated that, “Critics charged, however, that traditional growers of staple crops are still the biggest winners, thanks to deals between Southern and Great Plains lawmakers. Those crops — corn, wheat, soybeans and cotton — are enjoying record market prices and generating record profits.
“The bill would authorize nearly $10 billion in new payments to farmers, including a $5.1 billion ‘disaster trust fund’ that would cover losses from bad weather, as well as a revenue insurance program that would increase taxpayer costs by $4.7 billion over 10 years, according to the Congressional Budget Office. Spread throughout the huge bill are benefits for producers of wheat, milk, sugar, peanuts, barley, oats, honey and camelina, a seed used to make biofuels.
“It is uncertain whether the billions of dollars in new spending will remain in the final version of the bill. The House and Senate versions would be financed in part by controversial fiscal devices and changes in the tax code that would hit U.S. businesses. Without the extra funding, some new programs would have to be cut, reducing political support for a final version.”
(Note: This Associated Press item from yesterday highlights some of the key differences between the Senate and House versions of the Farm Bill).
Carolyn Lochhead, writing in today’s San Francisco Chronicle, reported that, “Farm subsidy supporters dared the Bush administration to veto a $286 billion farm bill that passed the Senate 79-14 on Friday, more than enough to override the president and keep crop subsidies flowing for the next five years, even as farm income sets records.
“Sen. Kent Conrad, D-N.D., pointed out that all four Senate Democratic presidential candidates – Hillary Rodham Clinton, Barack Obama, Chris Dodd and Joseph Biden – sent word that they would have voted for the bill had they not been busy campaigning in Iowa corn country.
“‘Seventy-nine votes in the United States Senate, and with four presidential candidates, that would be 83 votes,’ said Conrad, who engineered a new $5.1 billion ‘permanent disaster’ fund aimed at Great Plains farmers who plant wheat where the rain seldom falls and their crops often fail. ‘That would certainly be enough to override a veto.’”
Ms. Lochhead noted that, “The Senate and House versions of the farm bill still must be reconciled in a conference committee and passed again before the president gets a chance to sign or veto the legislation.
“All the amendments to the Senate bill that attempted to chip away at crop subsidies and divert the savings to nutrition and conservation programs, of key interest to California, failed under stiff opposition led by Conrad and Georgia Republican Saxby Chambliss.”
The S.F. Chronicle item added that, “The administration remained adamant that despite the coming election, President Bush would veto the bill and the one that passed the House in July. Acting Agriculture Secretary Chuck Conner said it relies on $15 billion in higher taxes and $22 billion in budget gimmicks and continues to send checks to the wealthiest farmers and landowners, mainly for corn, cotton, rice, wheat and soybeans. Federal support for dairy and sugar also would be increased.
“Bush had proposed limiting subsidies to those earning less than $200,000 a year.
“‘I can’t believe this is a tough issue,’ Conner said. ‘Taking tax dollars from middle-income Americans and transferring those dollars to the wealthiest few is simply bad policy.’”
David Rogers, writing yesterday at The Wall Street Journal Online, reported that, “The White House has protested the level of unrelated taxes approved by the new Democratic majority to pay for spending increases in both the House and Senate bills. At the same time the administration is pressing for new rules that would effectively disqualify about 38,000 part or full-time farmers whose adjusted gross income is above $200,000.
“Today’s 79-14 roll call followed months of Senate stalemate that will make it impossible now to reach an agreement before Congress goes home for the year. ‘This is a good bill, you can take it home,’ said Senate Agriculture Committee Chairman Tom Harkin (D., Iowa), clearly delighted with the strong vote. But with winter wheat already planted and farmers beginning to seek operating loans for the spring, the continued delays remain a source of anxiety for rural America, a real political battleground in the 2008 elections.
“Mindful of this, the House, which completed its farm bill in August, is expected to extend the current price support and loan programs through next Mar. 15 as part of an omnibus spending bill to be taken up next week. House Agriculture Committee Chairman Collin Peterson said this will be more than sufficient time for negotiators to strike a deal when lawmakers return in January after the holiday season.
“But the task won’t be easy given the multiple veto threats by the White House and the regional divide in the farm community over how best to impose payment and income limits on producers receiving aid from the government.”
(Note: To view a press release on the Senate-passed Farm Bill from Chairman Harkin, just click here; also, a press release from Ag Committee Ranking Member Saxby Chambliss (R-Georgia) can be viewed here. And, in statement released yesterday, Third District Rep. Adrian Smith (R-NE), who serves on the House Agriculture Committee, noted that, “It is very unfortunate it has taken so long for Congress to get to this point. Agriculture producers have been left hanging for months, FSA offices have been forced to close, and we have been putting issues which need to be addressed on the back burner…We now only have, literally, days left before this session of Congress is history. I hope we can put forward legislation which protects the future of our farmers and ranchers,” Smith said.)
Meanwhile, Nicole Gaouette reported in today’s Los Angeles Times that, “The Senate on Friday approved a farm bill that would continue to funnel billions of dollars in subsidies to wealthy landowners and farmers who are earning record-breaking prices for their crops, rebuffing a concerted campaign by some senators to shift money to conservation, nutrition and deficit reduction.
“The bill has drawn a veto threat from President Bush, who has criticized the subsidy payments and the creation of a $5-billion permanent disaster fund.
“The White House has an unlikely set of allies in taxpayer groups, environmentalists, physicians and rural community advocates who tried vigorously to change the bill’s priorities. They pledged to continue lobbying as the House and Senate now try to reconcile the differences in their respective bills.”
The L. A. Times article explained that, “The bill does establish some limits on subsidies. Currently, farmers with an adjusted gross income of $2.5 million can receive commodity payments. The bill would gradually lower that to $750,000 by 2010, except for growers for whom 67% of their adjusted gross income comes from a farm. Current law allows owners of former farmland that has been subdivided for residential use to continue to receive commodity payments. The bill would limit those payments.
“But four major efforts to change the bill’s subsidy system and to shift dollars into conservation and nutrition programs failed as a bipartisan group of senators from the Midwest and South banded together to defeat them.”
Near the article’s conclusion, Ms. Gaouette pointed out that, “For California growers, the most significant impact comes with more than $2 billion in funding for research and marketing for specialty crops, which include fruits, nuts and vegetables. ‘This is monumental in that from this point on, specialty crops will always be a significant part of any farm bill,’ said Tom Nassif, president of the Irvine-based Western Growers.
“Advocacy groups believed Congress could have done more and said much of the blame rested with the Senate’s Democratic leadership. Senate leaders agreed to a 60-vote threshold for some amendments that would have trimmed subsidies after Sen. Blanche Lincoln (D-Ark.), who supports subsidies, threatened a filibuster.
“Because of that decision, an amendment by Sen. Byron L. Dorgan (D-N.D.) and Sen. Charles E. Grassley (R-Iowa) that would have capped annual payments to farmers at $250,000, down from $360,000, was defeated even though it garnered 56 votes. Klobuchar’s amendment also gained a 48-47 majority.
“‘Those two amendments would have passed but for backroom shenanigans,’ said David Beckman of Bread for the World, a hunger advocacy group.”
The L.A. Times also posted an interesting sidebar item today, which noted that, “The 2007 Farm Bill drew aggressive attempts to limit the billions of dollars in taxpayer subsidies that go to a few crops. All the major efforts failed, even though some crops are selling at record prices and some subsidies go to wealthy farmers and landowners who do not farm at all. Here is a look at some senators and their close associates who benefited from subsidies between 1995 and 2005.”
DTN writer Chris Clayton reported yesterday that, “While some senators had demanded changes in commodity programs or cuts in spending, the vote was nonetheless the largest in support of the farm bill in the U.S. Senate since 1973, said Sen. Kent Conrad, D-N.D., one of the bill architects.
“After wrangling all year on the farm bill, Senate leaders pushed to get the bill passed Friday to avoid carrying work into the weekend. Despite complaints from some senators that their amendments were junked, the bill passed with little final debate. The bill passage also comes one day after senators increased the nation’s renewable fuels standard for ethanol and other biofuel products.”
Mr. Clayton stated that, “In a conference call with reporters, Conner said USDA officials were disappointed with the breadth of the vote for the bill, but he dismissed the fact it would have been more than enough to override a veto.
“‘We continue to maintain that this bill has a tough road ahead of it,’ Conner said.”
(Note: A complete transcript and audio copy of Sec. Conner’s conference call is available here).
The DTN item pointed out that, “Most grain producers right now would not be affected by changes in commodity programs, mainly because commodity prices are too high for marketing-loan gains or counter-cyclical payments to kick in. The biggest difference for larger producers will be the elimination of the three-entity rule farmers now used to maximize commodity-program payments.
“The Senate bill would lift all caps on marketing-loan gains with the theory that if the higher commodity prices tank, then the producer will need a higher level of support to make up for the lost revenue. That is comparable to language in the House bill as well.
“On direct payments, the Senate keeps the current $40,000 cap while the House did increase those direct-payment caps to $60,000 a year.
“In the counter-cyclical program, the Senate bill makes some adjustments to counter-cyclical target prices. Those include increasing the wheat target price from $3.92 per bushel to $4.20, a 28-cent increase. In the House version, wheat increases 23 cents a bushel.
“The Senate stuck with a House figure on target prices for soybeans, which would go from $5.80 a bushel to $6 a bushel, a 20-cent increase. The target price for corn remains at $2.63 a bushel in both bills.”
In additional reporting on the nuts and bolts of the Senate-passed legislation, Reuters writer Charles Abbott reported yesterday that, “Congress wants to weave a ‘revenue protection’ strand into the U.S. farm safety net, a signal change in policy, in the $286 billion farm bill that is one step from final passage, expected in early 2008.
“The Senate passed its version, 79-14 on Friday, opening the way for negotiations with the House on language to send to the White House, which also supports revenue protection for grain, cotton and soybean growers.
“Both chambers support revenue protection. They also would spend more on land stewardship and public nutrition programs such as food stamps, encourage development of cellulose as a feedstock for fuel ethanol and give more research and marketing aid to fruit, vegetable, nut and nursery crop growers.”
Mr. Abbott went on to explain that, “So far, lawmakers would offer revenue protection as an option to the long-time farm program. The Bush administration proposed in January that it apply to all farms. The Senate would use a statewide revenue trigger; the House and the administration would use sales nationwide.
“Farmers could enroll in the revenue protection program for the safeguard against crop losses, say some analysts, since high grain prices make it unlikely traditional subsidies will be paid. But others say farmers would be reluctant to give up ‘direct’ payments totaling $5.2 billion a year in the current farm program.”
Lastly today, Philip Brasher, reported in today’s Des Moines Register, that, “Larry Combest, a Republican congressman turned lobbyist who was chairman of the House Agriculture Committee when the 2002 farm bill was written, called the tax provisions the ‘real challenge’ facing congressional negotiators.
“Combest, whose firm represents cotton, sugar and grain interests that benefit from existing price-support programs, said at a news conference this week that Bush was inviting a ‘political catastrophe’ if he vetoes a farm bill.”
Keith Good
