“However, lawmakers remain sharply divided over a set of tax provisions that senators are demanding to have included in the bill. Lawmakers also have yet to agree on how to pay for increases in spending.
“Existing farm programs were scheduled to expire at the end of the day, but Bush signed into a law an congressionally approved extension that goes through next Friday.”
Mr. Brasher noted that, “The congressional dispute over the farm bill spilled out into public at a meeting today of the House and Senate negotiators.
“The lawmakers bickered over elements of what House members had proposed in a private meeting. Senators also expressed frustration with House objections to the tax package, which includes a variety of tax breaks for landowners, the biofuels industry and others.”
Peter Shinn reported on Friday at Brownfield that, “President Bush signed another one-week extension of the 2002 farm bill today as negotiations on a new farm bill continued in Congress. While the House and Senate have made and exchanged offers and counter-offers over the last few days, there’s still no solid agreement on exactly how much the farm bill will spend, how it will be paid for or whether or not it will include substantial ag-related tax cuts. All of those questions have to be decided by members of the House Ways and Means and Senate Finance Committees.
“In closed-door meetings Thursday, House farm bill conferees offered to spend $9.5 billion over the Congressional Budget Office (CBO) baseline for farm programs. Of that total, $6 billion represents an earlier offer from the House, $2 billion would be earmarked for a permanent ag disaster aid program, $500 million would go toward nutrition and $1 billion would go to ag-related tax provisions. And during a public meeting of the House-Senate Farm Bill Conference Committee meeting Friday, House Ag Committee Chairman Collin Peterson told Senate Ag Committee Tom Harkin the new House proposal represented a major shift toward the Senate’s farm bill proposal.
“‘I think you should view that as significant progress,’ Peterson said. ‘We are much, much closer than where we were.’
“And during Friday’s meeting, the Senate made a counter-offer that continued to call for $10 billion in spending over the CBO budget baseline and reduced the size of its proposed ag-related tax package from $2.5 billion to just over $2.4 billion. But the Senate’s tax proposals remain extremely contentious. One key point brought forward by ranking Peterson is that many House members believe the Senate’s tax proposals will actually cost much more than projected. That’s because several of the tax provisions are scheduled to sunset sooner than many think they actually will.”
Also with respect to the tax provisions and their potential projected cost, Chris Clayton noted on Friday at the DTN Ag Policy Blog that, “The basic Senate argument is the senators have established $2.4 billion in tax cuts, some of which have sunsets. The Senate has trimmed its package and gotten some clarification on scoring from the Congressional Budget Office.
“The House conferees, especially those on the Agriculture Committee, continue to argue that the taxes are outside their purview. Rep. Bob Goodlatte, R-Va., also argued that part of the problem that the House side has is that once some of these tax cuts are made, there will be a feeling of obligation in Congress to later extend the measures beyond the sunset provisions. That will make the tax cuts potentially far costlier.
“The House has countered with up to $1 billion in tax cuts.
“There was a lot of round and round among conferees, agreeing to disagree on interpretations on cost and ability to come to terms on a deal.”
Reuters writer Charles Abbott reported on Friday that, “President George W. Bush reluctantly gave Congress one more week to wrap up the new U.S. farm law, already six months overdue, and the White House called for stricter crop subsidy rules.
“House and Senate negotiators are deadlocked over how to pay for a $10-billion spending increase for the farm law and whether to include a $2.4-billion Senate tax package. They blamed each other on Friday for the lack of progress.
“If there is no breakthrough, said Senate Agriculture Committee chairman Tom Harkin, he will order votes on Tuesday to settle the matter. Harkin is in charge of the talks.”
Mr. Abbott indicated that, “By the end of next week, Harkin told reporters, the farm bill will be wrapped up or there will be a decision to either extend the 2002 farm law or to let the farm program revert to 1949 law, with land controls and high grain subsidy rates.”
The Reuters item explained that, “When negotiators met on Friday, the Senate presented a revised package of 15 tax cuts worth $2.4 billion. They range from faster tax write-offs of race horses to incentives to developing cellulose as a feedstock for fuel ethanol…[H]ouse Speaker Nancy Pelosi offered $1 billion in tax breaks and House negotiators suggested offsets that included a $1 billion cut in commodity programs, possibly ‘direct’ payments, and $2 billion for an agricultural disaster fund, half the amount targeted in a House-Senate ‘framework’ for the bill.”
Dan Looker reported on Friday at AgricultureOnline that, “Yesterday negotiators from the House and Senate shaved billions of dollars in difference over how increased spending for a new farm bill will be paid for, but remaining obstacles over ag-related tax cuts will still need to be worked out over the weekend if a new farm bill has a chance of succeeding.
“At a farm bill conference committee meeting Friday, Senate Agriculture Committee Chairman Tom Harkin said the tax cuts, which now stand at an estimated $2.4 billion over 10 years, would be ‘fully paid for’ with ag-related reforms in the tax code and a reduction in the ethanol tax credit.
“Agriculture Committees from both the Senate and House have already agreed to a rough outline, or framework, of how they plan to spend an additional $10 billion for the new farm bill over the next decade (with the five-year bill costing about $300 billion). But until yesterday, the House and Senate were far apart on how to come up with the extra $10 billion. The House had proposed increasing spending by about $6 billion and had not identified how another $4 billion would be found for a new permanent disaster program favored by the Senate.”
Mr. Looker noted that, “But by Friday morning, the two sides were closer. The House had come up with sources of money for $9.5 billion.
“But there will still misunderstanding over how that would be done.
“Harkin said that part of the extra $3.5 billion proposed by the House was from a $1 billion cut in direct payments. But House Agriculture Committee Chairman Collin Peterson said that the $1 billion might include other things, including some savings from farm program payment reform.
“Representative Bob Goodlatte, the ranking Republican on the House ag panel, agreed.
“If Harkin understood all of that $1 billion came from direct payments, Goodlatte said, ‘I misspoke. It is to come from the ag portion of the bill.’”
FarmPolicy.com audio clips from yesterday’s Conference meeting are also available.
To listen to Senate Ag Comm. Chairman Harkin’s opening remarks, in which he outlined some of the formal developments of the negotiations, click here (MP3- 4:00).
To listen to Chairman Harkin and House Ag Comm. Chairman Peterson discuss some of the informal issues that were brought up in a meeting from Thursday evening, including direct payments, just click here (MP3- 2:16).
To listen to Senate Ag Comm. Ranking Member Saxby Chambliss (R-Georgia) offer his thoughts on his understanding of the direct payment offer from the House, click here (MP3- 0:16).
To listen to House Ag Comm. Ranking Member Bob Goodaltte (R-Virginia) respond to Sen. Chambliss on the direct payment issue, just click here (MP3-0:48).
To listen to Chairman Peterson’s thoughts from the House perspective regarding elements of their offer, just click here (MP3- 0:40).
And Congressional Quarterly reported on Friday that, “Farm bill negotiators will meet again next week after Friday’s talks broke off without much progress on the remaining contentious issues.
“Talks among staff members are expected to continue through the weekend, and another official conference committee meeting is tentatively set for April 22.”
Meanwhile, Associated Press writer Mary Clare Jalonick noted on Saturday morning that, “It’s not a good year for a farm bill.
“Crop prices are sky-high. President Bush, who thinks the nation’s farm program is bloated, is leaving office and doesn’t need to court voters in rural America. There is less budget money to work with. The leadership in Congress doesn’t exactly hail from farm country, and those lawmakers who do also must grapple with bigger election-year problems –such as mounting job losses and a deepening foreclosure crisis.”
The AP article reminded readers that, “Things were different in 2002, when the last bill to expand agriculture and nutrition programs was written. Back then, rural America was recovering from hard times and there was more federal money to be spread around.”
In additional background, the article noted that, “Congressional dynamics have also changed since the last farm bill. Tom Daschle, the former Senate Democratic leader from South Dakota who brokered the negotiations six years ago, lost his seat in 2004. Former House Majority Leader Tom DeLay, a Republican, also hailed from a farm state, Texas.
“House Speaker Nancy Pelosi of California and Senate Majority Leader Harry Reid of Nevada have not traditionally been involved in farm debates. Reid’s home state has little agriculture and Pelosi is from urban San Francisco.”
Moving to current issues, Ms. Jalonick stated that, “Negotiators face several obstacles. The Democratic chairmen of the House and Senate agriculture committees, Minnesota Rep. Collin Peterson and Iowa Sen. Tom Harkin, have lost control of the legislation as tax packages were added to both bills to help pay for them and win votes.
“That has brought into the mix House Ways and Means Committee chairman Charlie Rangel, who represents few farmers in his New York City district. He and Senate Finance Chairman Max Baucus, D-Mont., are charged with finding an extra $10 billion for the bill but have agreed on very little.
“At a farm bill meeting in Rangel’s office Thursday, shouting could be heard behind closed doors. Several senators, including Baucus, left angrily.”
In conclusion, the AP article noted that, “Both sides traded offers Friday and a deal could still come together by April 25, when the bill is now set to expire after Bush reluctantly agreed to extend current law for a fourth time. If a deal doesn’t happen, the law may have to be extended for a year or longer.
“Farm-state lawmakers say an extension is not ideal and the new legislation is still needed, even if it isn’t needed now. Gas prices are high, hurting farmers and ranchers who use a lot of fuel. And crop prices could always drop.
“Farming, like writing a farm bill, is a volatile business.”