Farm Bill Blowup 

Family Farm Alliance

July 26, 2007

According to The Ferguson Group, who represents the Family Farm Alliance in Washington , D.C. , there has been a “blowup” on the farm bill on a few fronts:

      The first is the tax offset package for the nutrition program (recall that House Agriculture Committee Chairman Peterson was allowed to go over the budget baseline only if he could find offsets). There is a provision that would prevent foreign-owned companies from shifting their income to countries with lower taxes. Rep. Doggett (a member of the Ways and Means Committee which has jurisdiction over taxes) views this proposal as merely closing a tax loophole and thereby providing an addition $7.5 billion over the next 10 years. Republicans and business groups are strongly opposed and view the proposal as a tax increase. 

      The second is that President Bush has announced he will veto the farm bill as currently written. The President has a variety of concerns listed in his “Statement of Administration Policy” but the most important is that he believes offsets should not come from tax increases.  Veto threats over fiscal policy have become commonplace during this Congress. 

      Lastly, due to the contentiousness of the tax provisions and the approximately 100 amendments (many controversial) submitted to the House Rules Committee (which governs how bills will be brought to the floor) there is a possibility that consideration of the farm bill might slip until tomorrow or potentially the weekend. 

Here is an article with a good description of yesterday’s problems in the House Rules Committee.  

Dan Keppen

Executive Director

Family Farm Alliance

GOP stages mutiny on farm bill after Dems reveal offset plan

Allison Winter, E&E Daily reporter

House Agriculture Committee Chairman Collin Peterson (D-Minn.) is facing considerable new opposition from Republicans against his farm bill rewrite as he prepares to bring it to the floor.

The farm bill, scheduled for a floor debate today, would fund nearly $300 billion in farmland conservation and energy projects, food and nutrition programs, and crop supports for the next five years. The House Agriculture Committee gave unanimous support to the measure last week, but Republicans reversed course yesterday because of concerns with how Democrats want to pay for the measure.

After a closed-door meeting of Republicans yesterday, Agriculture Committee ranking member Bob Goodlatte (R-Va.) said every Republican on the Agriculture Committee and in leadership would now oppose the bill. The decision puts a partisan spin on a bill that has split loyalties more geographically than along party lines.

"What was bipartisan in committee ... unfortunately has suddenly been made an extremely partisan piece of legislation," Goodlatte told the House Rules Committee yesterday.

Goodlatte's announcement caused an uproar among Democrats, who defended the funding scheme.

"If you're going to take down the whole dang farm bill for ideological discomfort ... give me a break," said Rep. Dennis Cardoza (D-Calif.), who serves on both the Agriculture and Rules committees.

At issue is the tax package meant to offset a $4 billion increase in funds for food and nutrition programs. The tax proposal from Rep. Lloyd Doggett (D-Texas) would raise $7.5 billion over 10 years by eliminating a tax benefit for some foreign-owned companies in the United States .

The Agriculture Committee has been working on the farm bill with the understanding that the Ways and Means Committee would provide some offset to help them increase spending in the bill while keeping in line with the House's budget rules. Throughout the process Republicans have said they would not support a tax increase, but the details on the plan were just released yesterday. Goodlatte said he felt "betrayed."

Peterson and other Democrats described the package yesterday as "closing a tax loophole" that allows some companies to send their profits to a third-party country with lower tax rates. House Ways and Means ranking member Jim McCrery (R-La.) called it "the Democrats' surprise farm bill increase" and said it would violate international treaties and hurt U.S. competitiveness.

"If you want to call it a tax increase you can. If you want to call it closing a loophole you can. It depends on what spin you're putting on it," Peterson said.

The Bush administration came out with a veto threat against the bill yesterday. Agriculture Secretary Mike Johanns said he and other advisers to the president said they would recommend a veto if it arrives on his desk without any changes to Peterson's proposed payment and tax changes. Johanns said the committee's payment limits would have to affect no more than 7,000 people and called some of the cost-savings efforts "budgetary gimmicks."

"Higher taxes when you have very little reform is just a very, very difficult message," Johanns told reporters yesterday.

The administration proposed tighter payment limits, lower subsidies for some crops and consolidating conservation programs. Johanns said he expects to see amendments on all of those issues on the floor.

Peterson said the administration was making "a last-ditch effort to kill this bill." He added: "They didn't think we'd pull it together."

A bipartisan group of House members backing an amendment to scale back farm payments and increase conservation funding is hopeful the tax fracas might give them more support for their proposal, which would avoid the tax offsets by decreasing farm spending. Their proposal includes many of the administration's proposals to scale back farm subsidies.

Rep. Ron Kind (D-Wis.) told the Rules Committee last night that his wide-ranging amendment to overhaul farm payments would "get ourselves out of this offset box." Reps. Paul Ryan (R-Wis.), Earl Blumenauer (D-Ore.) and Jeff Flake (R-Ariz.) are cosponsors of the amendment to cut farm subsidies for anyone making more than $250,000. The proposal would invest more than $3 billion more in conservation programs.

Rules Committee Chairwoman Louise Slaughter (D-N.Y.) said "there is a lot of interest" in the amendment.

In an interview after the markup of the farm bill rule, Kind described Goodlatte's remarks as a "bombshell" for the committee's bill. He said he is anticipating more Republican support for his measure, but "there are a lot of moving parts."

The Kind amendment has the backing from a diverse array of groups, including the ONE campaign, Environmental Working Group, Oxfam, Taxpayers for Common Sense, Bread for the World, Environmental Defense, Club for Growth and the National Black Farmers Association.

But even with the support of those groups and some dissident Republicans, the amendment faces an uphill battle. House Speaker Nancy Pelosi (D-Calif.) has endorsed Peterson's bill, and the agriculture chairman has said he would pull the entire effort and extend the 2002 bill if the Kind proposal passes.

If they are unsuccessful with the larger amendment, Blumenauer and Ryan have several other proposals, including an amendment that would block any farmer from receiving more than $250,000 in crop subsidies.

Other amendments that would find savings within the farm bill include a proposal from Rep. Jim Cooper (D-Tenn.) that would trim $4 billion over 10 years from the crop insurance.

Rep. Marilyn Musgrave (R-Colo.) also hopes to bring forward an amendment that would strike labor requirements for ethanol refineries, which brought about another partisan spat. The bill includes a requirement for biofuels refineries receiving federal loans to pay their workers according to the Davis-Bacon wage standards for federal construction contractors.

Rep. Kirsten Gillibrand (D-N.Y.) wants to introduce an amendment to help local governments buy private forest land for use as public land for hunting and recreation. It has the support of 36 conservation groups and 14 labor unions.

Elsewhere in the conservations title, Goodlatte wants to introduce an amendment to set uniform standards for all of USDA's easement programs. And Rep. Jay Inslee (D-Wash.) has a proposal for the energy title that would require all biorefineries to have "greenhouse gas emissions reductions" as one of their goals before receiving federal loans.

The Rules Committee adjourned last night without voting on the floor rule for the farm bill. A vote is expected in committee today, to be followed by floor action.