Vote on farm bill expected today

By Chris Casteel

Published: July 27, 2007

WASHINGTON — House Democrats pushed the controversial farm bill forward Thursday, beating stiff resistance from GOP lawmakers who turned against the legislation this week because of a last-minute tax provision.

The bill is expected to come up for a final vote today.

Though much of the partisan debate late Thursday dealt with a tax provision for foreign-based companies, Republicans and Democrats from farm states united to defeat an amendment that would have slashed farm subsidies in the $286 billion bill, particularly to wealthy farmers and large operations.

The splintered loyalties made for an extraordinary debate on the five-year bill, as farm-state Republicans both attacked and defended the legislation that promises billions of dollars for their agricultural producers. Republicans on the Agriculture Committee wanted to send the measure back to the committee to remove the tax provision inserted this week, but they didn't want farm subsidy critics to change the basic elements of the legislation.

Rep. Frank Lucas, R-Cheyenne, one of the senior members on the House Agriculture Committee, said the tax provision, which he called "a massive tax increase,” had divided farm program supporters along partisan lines after decades of cooperation on farm bills.

"I never thought I would be on the floor of the House advocating a ‘no' vote on a farm bill,” Lucas said Thursday night.

Rep. Collin Peterson, D-Minn., chairman of the House Agriculture Committee, and other Democrats said they were simply proposing to close a tax loophole that allows foreign-based companies to shift income to offshore subsidiaries.

Peterson said the bill crafted by the House Agriculture Committee last week contained "significant reforms” to address criticisms of farm subsidies. He said the bill would extend the safety net that protects farmers when prices drop while also investing more money in conservation, nutrition and incentives to produce ethanol from sources other than corn.

After the tax provision was inserted this week, House Republicans had been hoping to stall the bill and send it back to the Agriculture Committee.

Democrats united on a procedural vote Thursday night to allow debate on the bill to proceed. The vote was 222-202.

Insertion of the tax provision this week turned the farm bill into a partisan battle and totally shifted the dynamics of the debate. The House Agriculture Committee had approved the bill unanimously last week, with both sides preparing for pitched battles on the House floor about whether farm subsidies should have a stricter means test and whether annual payments should have tighter limits.

There was wariness on the part of committee Republicans about a $4 billion funding hole in the bill and how it would be filled. They said they were assured it wouldn't be filled with a tax increase.

Rep. Marilyn Musgrave, R-Colo., said Thursday night that committee Republicans "find ourselves in the awkward position of having to oppose a farm bill that we helped craft because of the tax increase.”

The bill took another hit this week when the White House announced a veto threat.

U.S. Agriculture Secretary Mike Johanns said the House bill didn't include enough subsidy reforms, which cost billions of dollars each year. Numerous analyses have shown that the substantial majority of the payments go to a small percentage of farmers, most of which are large operations.

The House bill would prohibit subsidies to anyone with a three-year adjusted gross income of $1 million or more annually. It would also prohibit subsidies to people with adjusted gross incomes between $500,000 and $1 million per year unless two-thirds of their income comes from farming.

The Bush administration had proposed an income limit of $200,000 per year.

A House bipartisan group offered an amendment that would set an income limit of $250,000 and also cap annual payments at $250,000 a year. There is no limit on how much a farmer can collect each year when crop prices drop. The new bill also contains no effective limit on payments.

The current farm bill, approved in 2002, contains no real limit on how much a farmer could collect in a year. The new bill also would not limit payments when crop prices dropped below targets.

Rep. Ron Kind, R-Wis., who authored the amendment to cut subsidies, said payments for too long had been going to large operations that "gobble up” their neighbors' farms.

Farm-state lawmakers, whose districts get the bulk of the payments for "program crops” such as wheat, cotton, and soybeans, argued that Kind's amendment would destroy the safety net that lets farmers to weather tough years.

Kind's amendment was defeated by a vote of 117 to 309.

The House did approve an amendment by Lucas that will allow cattle ranchers to collect disaster aid even if they didn't have insurance. Congress earlier this year approved $3 billion for farmers and ranchers hurt by a variety of weather disasters since 2005.

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