Farm Bill conference meeting
With an agreement among key farm bill negotiators finally in hand, the conference committee is expected to make swift work this week on the reauthorization of the five-year bill overseeing agriculture, conservation, energy and nutrition programs.The committee will hold a formal conference meeting this evening, where they are expected to approve a new framework for funding and offsets for the bill that key House-Senate negotiators from the tax and agriculture panels agreed to late Friday.
Energy Harvest: Power From the Farm—An E&E Special Report
The new framework for the bill includes a $4 billion boost above the current baseline for conservation programs and $10.3 billion in new spending on nutrition.
Crop subsidies and reductions to a proposed disaster relief program took the brunt of the spending cuts to offset the new spending, lawmakers said.
The framework also includes a pared-down version of the Senate’s tax package that would roll back tax cuts for corn-based ethanol and give new tax breaks for the cellulosic ethanol and timber industries.
The leaders of the House and Senate Agriculture committees reached the agreement Friday after several days of intense closed-door negotiations in the Capitol. Lawmakers still have to work out some details of the $300 billion, five-year measure, but they said they expect a swift resolution of the conference this week.
“There were some tough spots, but we were able to get by all of that,” House Agriculture Chairman Collin Peterson (D-Minn.) said after meetings Friday. “Any member can offer any amendment [in the conference committee], but I don’t see a need for any votes—I think we’ve got this so it won’t require any of that.”
The agreement still must reach approval of the conference committee and the full House and Senate, as well as the White House. President Bush has held a hard line with the farm bill, threatening to veto it unless it reforms crop subsidies and avoid tax increases.
Bush administration officials were not present for the negotiations last week. A White House spokesman said they are reserving judgment until they can review the entire package.
“As we’ve said in the past, the president believes that a new farm bill should include important reforms, not raise taxes and be fiscally responsible,” said White House spokesman Scott Stanzel.
The leaders of the House and Senate tax panel agreed to rely on customs-users fees to offset much of the $10 billion in new spending for the bill. The fees, most of which would come from importers, do not classify as a tax and have not raised a red flag with the White House.
But other advocates for overhauling the farm bill are hopeful the White House will continue to press for more changes to the measure. Rep. Ron Kind (D-Wis.) said he hopes Bush “will stand firm in his commitment to a better bill.” Kind is one of the leaders of a group of House members pushing to throw out much of the current subsidy program.
“Negotiators managed to avoid every opportunity to reform wasteful, outdated subsidies while piling on additional layers of unnecessary spending,” said Kind. “It looks as though nothing has been done to address the waste and abuse that has been well documented over the last year.” No limits for farmers
One of the outstanding issues for the bill is limitations on crop subsidies—a controversial area where reformers like Kind would like to see more change.
Lawmakers said they are still working out a deal on income limits for crop subsidy recipients. Peterson said it would likely lower the cap for people who make most of their income off the farm, but have no limitation for on-farm income.
“The people who are going to take a big hit in the bill are non-farmers,” said Peterson.
Advocates for farm bill reform want to place more stringent limits on how much money landowners can receive in federal subsidies—regardless of where their income comes from.
The Bush administration proposed barring anyone who makes more than $200,000 per year from farm supports.
The Senate’s version of the farm bill, approved in December, would stop payments to non-farmers who make more than $750,000 a year. It had no income caps for farmers. The House bill would cut off farm payments for millionaire farmers or non-farmers who make more than $500,000. Both prompted veto threats from Bush. Corn gives way to cellulosic subsidies
The agreement also includes a package of tax incentives that totals close to $1.5 billion, according to members of the Finance Committee.
The package includes extensions and reductions of the ethanol tax credits and tariffs, said Sen. Charles Grassley (R-Iowa). The move is a step toward gradually transitioning the corn-ethanol industry to standing on its own. The package instead favors supports for cellulosic ethanol.
“It is a signal we are ready to shift to other less disruptive forms of ethanol production,” Senate Finance Chairman Max Baucus (D-Mont.) said of the package.
Corn-ethanol subsidies would see an almost 12 percent hit. The current 51-cent-a-gallon tax credit for corn-based ethanol would drop to 45 cents. In conjunction with that, it would also reduce the tariff on imported ethanol, Grassley said.
The winner in the tax package is cellulosic ethanol—made from corn stalks, woody plants or grasses. It would get a $1-per-gallon subsidy.
The move marks a significant shift for the farm-state lawmakers, who have been some of the biggest advocates for ethanol supports, and the booming grain and refinery industries that have come with them.
“This is a signal to the country that we’re starting to move away from corn to cellulose,” Peterson said. Sodsaver exemptions
The agreement includes protections for virgin prairie, long-sought from environmental groups, but has loopholes to allow some states to ignore them.
Conservation advocates have been pushing for years for a sodsaver program to bar federal subsidies for farmers who plow up native prairie.
The Senate sodsaver language, favored by conservation groups, would block crop insurance and disaster payments for farmers who plant on native prairie. The House bill limits the crop insurance ineligibility to four years.
The conference agreement has an “amalgam” of the House and Senate sodsaver provisions, Senate Agriculture Chairman Tom Harkin (D-Iowa) said Friday. All of the prairie pothole states would have to comply, but Montana and North Dakota would only opt in at their governors’ discretion.
Sodsaver is intended to address what conservation groups say is a backward system in current farm policy. The 2002 farm bill offers landowners conservation payments to conserve grasslands, but also gives crop insurance and crop subsidies that encourage plowing them up.
The Government Accountability Office issued a report this fall calling federal subsidies an “important factor” in encouraging the conversion of millions of acres of grasslands to row crops. The United States lost almost 25 million acres of privately owned grasslands between 1982 and 2003, GAO said. Conservation
The $4 billion increase for conservation trails the numbers negotiators had previously discussed, but still would give a significant boost to most farmland conservation programs.
Much of the conservation money would go to restore funding for programs that would otherwise expire under current law. The expiring Wetlands Reserve Program would get $1.3 billion above the 10-year baseline and the Grasslands Reserve Program would get $300 million.
The framework shifts almost $2.5 billion from the Conservation Reserve Program to other conservation programs—cutting down the Agriculture Department’s largest conservation program but infusing other working-lands programs with some of the money in its budget.
Lawmakers said it lowers the acreage cap for CRP to more closely reflect the reality of the program, which pays farmers to idle land.
The framework allots for 32 million acres in CRP. That total is less than the current limit of 39 million acres but still more land than most USDA officials expect to see in the program in the next several years. Enticed by high commodity prices, farmers have been taking some land out of the program, and USDA has held off on new open enrollments.
Other conservation programs would see a boost under the framework. The Environmental Quality Incentives Program would see a $2.4 billion increase over baseline levels, the Conservation Stewardship Program gets $1.1 billion, and the Farm and Ranch Land Protection Program gets $560 million. A new program for the Chesapeake Bay comes in at $372 million.
Given Another Week, Farm Bill Negotiators Close in on a Deal
The Senate-House conference committee tasked with hammering out the five-year farm bill (H.R. 2419) had an original deadline of April 18 that was extended until today. After marathon sessions all week, negotiators have come close enough to a final package to give leadership confidence to grant a further one-week extension to next Friday, May 2.
Yesterday, Agriculture Secretary Ed Shafer said Bush would veto the farm bill if funding for the farm bill came from a requirement that stock brokers and mutual funds report the cost basis of securities sold by their clients, a tax loophole closure that was estimated to value $6.2 billion and was favored by House Ways and Means Chairman Charles B. Rangel (D-N.Y.). Negotiators decided not to test the veto and will instead raise funding through customs user fees.
Allison Winter for E&E News describes the deal:The new framework for the bill includes a $4 billion boost above the current baseline for conservation programs, $10.3 billion in new spending on nutrition and new tax incentives for the timber and cellulosic ethanol industries. Crop subsidies and a proposed disaster relief program took the brunt of the spending cuts to offset the new spending, lawmakers said.Catharine Richert reports for CQ Today:
House and Senate conferees have struck a long-awaited deal on the new farm bill.The measure (HR 2419) will be worth about $570 billion over 10 years, with new funding for farm-related tax credits, a disaster aid program, and new funding for food stamps.
Those programs will in part be paid for by a $400 million cut to direct payments — a subsidy farmers get based on their acreage and the type of crop they grow — and a $250 million cut to a $4 billion disaster-aid fund.
But most of the offsets for the extra spending will come from extending customs user fees, a revenue-raiser favored by the Bush administration.
Nutrition programs would get a significant boost. Food stamps and food aid would top out at about $10.2 billion, up from an initial proposal of $9.5 billion.
Over the weekend, lawmakers will continue their discussions about preventing very wealthy farmers from collecting government subsidies. The conferees say they will have a conference report ready for House and Senate floor action by Monday.
Lawmakers worked on the measure most of Friday, particularly on the $10 billion in new spending.Allison Winter goes into further detail for E&E News:The struggle to offset extra funding had stalled negotiators for months, as lawmakers sought to satisfy not only competing interests within Congress but also the White House.
With the conferees finally closing in on a deal, President Bush on Friday signed the latest short-term extension of current farm law (S 2903), which Congress cleared Thursday. It continues the 2002 farm law (PL 107-171) for another week.
Thursday, lawmakers had to abandon a plan to offset some of the bill’s costs with a change in tax law that would require stock brokers and mutual funds to report the cost basis of securities sold by their clients after the White House warned that Bush would veto the measure if it included the provision.
The administration has not objected to customs user fees to subsidize new farm spending.
House Ways and Means Chairman Charles B. Rangel, D-N.Y., for weeks opposed tapping the user fees, which he planned to use as offsets for other priorities, such as the renewal and expansion of Trade Adjustment Assistance programs for workers displaced by trade and globalization.
With a final deal in place, it’s possible that Rangel agreed to allow the farm bill to boost user fees in return for a promise that lawmakers would include a $150 million, two-year extension of the Caribbean Basin Initiative, a program that provides trade preferences for countries there.
The CBI is a priority that Rangel had reportedly envisioned paying for with user fees anyway; attaching it to the farm bill would be an easy way to fast-track the extension.
Sen. Charles E. Grassley, R-Iowa., who is ranking member on the Finance Committee, confirmed that a CBI extension would be included in the final farm bill.
Negotiators indicated that the Senate Finance Committee has promised to help Rangel find other offsets for the TAA renewal, which Chairman Max Baucus, D-Mont., has prominently placed on his to-do list for this year.
With another lifeline, lawmakers hone in on farm bill funding deal
Congress gave farm bill negotiators another week to work on a new farm bill yesterday, as key lawmakers from the House and Senate struggled to complete a funding deal for the bill.
The House and Senate approved the weeklong extension of current farm programs, despite objections that work on the new bill has been dragging out for too long. A White House spokesman said President Bush, who has also balked at further short-term extensions, would sign it.
The extension gives lawmakers until May 2, when they must either pass another stopgap measure or resort to the permanent 1949 agriculture law, if a new bill is not completed.
Key lawmakers from the House and Senate tax and agriculture committees held marathon closed-door negotiation sessions yesterday in an effort to reach a deal on financing and offsets for the bill. A final deal remained elusive, but lawmakers said they were getting closer, despite a wrench thrown in from the White House—which rejected one of their major proposed offset measures.
“We always have more requests than money, but we are very close, very close,” said Sen. Max Baucus (D-Mont.), who chairs the Finance Committee and sits on the Agriculture Committee, after meetings last night.
Negotiators said parts – but not all – of the Senate’s tax package are still on the table. Lawmakers went through the package “item by item,” said Rep. Earl Pomeroy (D-N.D.). Provisions that are still in the mix include new incentives for cellulosic ethanol and endangered species conservation and cuts to the ethanol blenders tax credit. House members had previously rejected all of the tax incentives.
In addition to reaching agreement on the tax package, the panels are trying to find offsets for increased spending in nutrition, conservation, energy and a new permanent disaster title. Lawmakers said their job was made more difficult yesterday by the White House’s refusal to accept some of their proposed revenue-raisers.
Sen. Charles Grassley (R-Iowa) said the “overriding issue” remained how to find acceptable offsets for the new spending.
Grassley said the Bush administration was refusing their proposed offset for the bulk of the $10 billion in revenue they wanted to add to the bill. The offset was to come from a new requirement for brokers to report the values of customers’ stock sale, estimated to raise $6.2 billion.
In remarks in Kansas City yesterday, Agriculture Secretary Ed Schafer said Bush would veto the bill if it included the reporting requirement, according to news reports.
“They keep moving the goalpost and when we start getting to a final deal, they change the terms they will accept,” said Pomeroy. “I think they don’t want a bill in the White House – if they sign it, they offend people, if they veto it, they offend people.
“They are doing everything they can to make this more difficult,” Pomeroy added.
Lawmakers are now eyeing use of customs-users fees for their offsets, Senate Agriculture Chairman Tom Harkin (D-Iowa) said after their meeting last night.
House Ways and Means Chairman Charles Rangel (D-N.Y.) has objected to use of the customs-users fees for the farm bill in the past but would not comment on them yesterday. He said it was “very difficult to find money” but that he was “very comfortable” he would have offsets for the bill.
Rangel, who left last night to spend the weekend in New York, said it is now up to the Agriculture committees to decide on what they want to use the money for.
“I can make enough adjustments and have enough flexibility to fulfill whatever they come up with,” Rangel said.
As the leaders of the House and Senate tax panels held one meeting on the spending issues, members of the Agriculture Committee held another closed-door meeting downstairs in the Capitol to try to find more cuts to farm programs that would help fit the bill within its bottom line. Lawmakers are looking for $700 million they can squeeze from the farm commodity subsidies.
“We are still trying to shoehorn this into a smaller space,” Harkin said of the whole bill. “We are looking for new ways of arranging and moving this around.”
Kid Nutrition Programs in Farm Bill
Senate Democrats will hold a news conference to discuss the nutrition programs in the Food and Energy Security Act of 2007 (HR 2419 – Farm, Nutrition and Bioenergy Act of 2007) and the impact they will have on children’s health. The bill would expand access to the Fresh Fruit and Vegetable Program and increase funding, grants and research to growers of fruits, vegetables and other specialty crops. Contact: Jim Manley at 202-224-2939
Participants- Sen. Tom Harkin (D-Iowa)
- Sen. Debbie Stabenow (D-Mich.)
- Sen. Bob Casey (D-Pa.)
- Sen. Sherrod Brown (D-Ohio)