Washington, D.C. – The Senate overwhelmingly approved its farm bill Friday, clearing the way for negotiations to start with the House and the Bush administration on a compromise measure.
The biggest battle is likely to be over how to pay for a new farm bill, which would extend agriculture, conservation and nutrition programs for five years.
The Bush administration has threatened to veto both the Senate legislation, which passed 79-14, and a version that passed the House last summer because they would tax corporations to get new revenue to pay for increases in farm bill spending.
The White House issued a statement after Friday’s vote saying the bill would “increase the size and scope of the federal government and damage the credibility of farm programs.” The administration also is insisting on tighter eligibility rules to cut off subsidies to wealthy farmers and landowners.
The Senate bill would increase government spending by about $6 billion over five years.
“Revenue items are tough to get through Congress in any shape, manner or form,” said Tom Buis, president of the National Farmers Union.
David Beckmann, president of Bread for the World, an advocacy group that has been pushing for an overhaul of farm policy, said, “This thing is far from done.”
The House farm bill would get its extra revenue from offshore oil royalties and taxes on foreign companies with U.S. subsidiaries. The Senate bill would instead tighten rules on corporate tax shelters.
The White House raised similar objections to an energy bill and forced congressional Democrats this week to jettison a planned tax increase on oil companies.
The 79 votes for the Senate’s farm bill, the most for a farm bill in the Senate since 1973, is more than enough to overcome a presidential veto. But the House version passed 231-191, well short of a veto-proof majority.
Sara Hopper, who follows farm policy for Environmental Defense, an advocacy group, said there’s an easy way to pay for expanding conservation and nutrition programs while avoiding tax increases: Cut farm subsidies. The biggest pot of money in the bill is the more than $5 billion in fixed annual payments that go to grain and cotton farms. About $500 million of that goes to Iowa each year.
But farm groups have resisted any reduction in those payments. The group of congressional negotiators, known as a conference committee, that will write the final version on the farm bill will be largely made up of members of the House and Senate agriculture committees that wrote the bills in the first place. Sen. Tom Harkin, D-Ia., will chair the conference committee.
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.
A look at the major features of the House and Senate bills:
Farm subsidies: Both bills preserve the three main subsidy programs for grain and cotton farms. The Senate bill would set up a new disaster assistance program for farmers who lose crops to droughts or floods.
Both bills have an optional new revenue-protection program sought by corn growers. Under the House bill, payments would be tied to changes in national-level revenue. The Senate bill uses a state-revenue trigger that’s more likely to provide payments.
Energy: The Senate bill includes a new tax credit, dropped from the energy bill, to spur the development of new feedstocks for fuel ethanol, including crop residue, switchgrass and other sources of plant cellulose.
The credit would be funded through a reduction in the tax credit that subsidizes conventional ethanol. The Senate bill also provides extensions of tax subsidies for wind energy and biodiesel, measures that were dropped from the energy bill.
Conservation: The Senate bill would add 80 million acres to the Conservation Security Program, which provides annual payments to farmers who take steps to curb soil erosion and make other improvements.
The House bill would instead expand the Environmental Quality Incentives Program, which subsidizes the cost of installing pollution controls and water conservation measures.
Meat: Both bills would require country-of-origin labeling for beef and pork under compromise rules. The Senate bill would ban meatpackers from controlling their own livestock supplies.
By Philip Brasher
Register Washington Bureau
15 December 2007
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