Given Another Week, Farm Bill Negotiators Close in on a Deal

Posted by Brad Johnson Fri, 25 Apr 2008 20:23:00 GMT

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.

More from CQ:
Lawmakers worked on the measure most of Friday, particularly on the $10 billion in new spending.

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.

Allison Winter goes into further detail for E&E News:

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.”


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