Senate debates farm bill; administration threatens veto

by Jay Sjerven
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WASHINGTON — The day after the Food and Energy Security Act of 2007 was brought before the full Senate, Acting Secretary of Agriculture Charles Conner asserted he and other senior administration officials will recommend President George Bush veto the legislation if it arrives on his desk in its current form.

Mr. Conner asserted, "We believe this bill simply makes a mockery of the budget process." He charged the bill contained nearly $22 billion in "budget gimmicks" and $15 billion in new taxes.

"This is unacceptable," he said.

He decried what he said was $12 billion in unfunded commitments, including an additional $7 billion for the Food Stamp Program and $5 billion associated with the establishment of a disaster assistance fund. He said the bill "sunsets" the expanded funding for these programs at the end of the five years of the farm bill, which concealed the true cost of the bill should those expansions be extended.

Mr. Conner asserted the bill raises nearly $15 billion from new taxes.

"We don’t believe other sectors should be asked to pay additional taxes for farm programs, especially when the current bill continues providing farm subsidies to millionaires living on Park Avenue," he said.

Beyond the budget issues, the administration was disappointed the Senate agriculture committee did not do more with regard to reforming farm programs, Mr. Conner said. He outlined three areas where he thought reform was not adequately addressed.

The first was the administration’s proposal to link a producer’s loan deficiency payment rate to the date he loses beneficial interest in the program crop, i.e. the day he sells it.

Second, the administration wants tighter controls on eligibility to receive government payments and tighter limits on total payments an individual may receive.

"A good farm bill just simply has to say to the wealthiest 2% of Americans, you are not going to be eligible for payments using tax dollars that we have taken from middle income Americans when you are some of the wealthiest taxpayers in this country," Mr. Conner said.

Mr. Conner said loan rates and target prices must not be raised as proposed by the Senate bill.

"I have described it before as us painting a bull’s eye on the back of our farmers, in effect asking others to challenge our farm programs and the legality of those programs," he said.

The veto threat drew swift responses.

"It is disappointing that the administration is already threatening a veto of this bill while the Senate is still considering this measure," Senator Tom Harkin, chairman of the Senate Committee on Agriculture, Nutrition and Forestry, said. "The administration takes issue with virtually every part of this bill — even the distribution of fresh fruits and vegetables to school children."

Senator Saxby Chambliss of Georgia, ranking member on the agriculture committee, said, "I am deeply disappointed that the administration has expressed such strong discontent with the farm bill reported out of the Senate agriculture committee and substitute amendment from the Senate finance committee. Our committee worked for months to craft a strong bipartisan farm bill while remaining fiscally responsible…However, we will make an effort to address their concerns as we continue to debate the measure on the Senate floor."

Senator Kent Conrad of North Dakota, chairman of the Senate Committee on the Budget, urged the administration to "back down" from its veto threat until the bill takes its final form. Mr. Conrad asserted the administration’s charge the bill contained $37 billion in new spending was a "concoction." He pointed out the cost of the farm bill was $288 billion, or $8 billion above the baseline, not $37 billion above the baseline. The extra $8 billion was "paid for" by closing tax loopholes, not raising taxes. He said the administration’s use of a 10-year timeline was deceiving. The farm bill’s term is five years, and the decision whether to continue programs expanded under the current bill would be a matter for a future Congress to take up in preparing the next farm bill. He asserted the bill was fiscally responsible and within the budget.

Senator Charles Grassley of Iowa, ranking member of the Senate Committee on Finance, who helped "find" additional funding for the farm bill, took the floor to explain the "revenue raiser" was a broadly supported codification of a tax law known as the economic substance doctrine. He asserted he supported such codification not because it raised revenue, though it would, but because it was good tax policy.

This article can also be found in the digital edition of Food Business News, November 13, 2007, starting on Page 28. Click here to search that archive.

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