Stage Set For Farm Bill Conference
Posted by: Phillip Fraas
December 21, 2007

The Senate completed its work on the 2007 farm bill last Friday, setting the stage for joint House-Senate conference committee meetings early next year to resolve differences between the Senate legislation and the farm bill passed by the House last July.

The so-called "conference" is an important part of the legislative process for any bill; and when a conference committee is considering a large and complicated proposal such as the farm bill, it has the added opportunity to ignore much of the Senate and House bills and draft with a third version that isn't necessarily anchored in either the House or Senate bill. And, it is that third version that counts, because that is one that Congress casts its final vote on and that the President signs or vetoes. 

Of course, here the conference bill (referred to as the "conference report") undoubtedly will include a lot that is common to both the House and Senate-passed bills--a continuation of the current farm support loan and payment mechanisms; the introduction of revenue-based counter-cyclical payments; expanded support of alternative energy production; new programs for the fruit and vegetable industries; and so on.

Beyond that, the circumstances under which the conference does its work will be different that those that applied when the House and Senate agriculture committees began their consideration of the farm bill earlier this year; and those changed circumstances could dictate some major changes to the new farm bill.

Primarily, I am referring to the budget stalemate that has arisen between Congress and the Administration on the farm bill. Both the Senate and House bills would increase spending for existing farm bill programs (the majority of which, by the way, goes for nutrition assistance to low-income Americans, not to farmers) and add new programs, especially ones to facilitate the development of alternative, biomass energy production, and both bills include provisions to increase tax revenues to pay for the added spending.

 The problem is that the Administration is strongly opposed to the revenue-raisers. Just this Wednesday, Acting Secretary of Agriculture Chuck Conner, in a speech before a commodity group in Washington, stated that because of the revenue enhancers and because neither the Senate or House bill has enough farm program reforms "the President's senior advisers . . . are recommending that he veto the farm bill as it now stands coming out of th House and Senate."

While the veto threat is real and it is hard to envision how a compromise is possible on spending since the Administration adamantly opposes any revenue-raising measures, what has taken place over the past few days on other spending legislation--the omnibus appropriations bill and energy bill, both of which passed and the President approved--suggests that a solution to this knotty problem might yet be possible.

What happened with those other bills is that the Administration gave some on added spending as long as Congress didn't include tax increases to pay for the new outlays. In turn, Congress dropped its insistence on "pay-go," that is, making sure that any legislation that increases spending has offsetting spending cuts in other programs or revenue enhancements to keep the legislation budget-neutral.

And, keep in mind that the Administration's own farm bill proposal would have increased farm bill spending by about $5 billion over ten years and did not include tax increases to pay for the increases. 

If the Administration accepts some increased spending without revenue raising and Congress doens't insist on applying "pay-go" to the bill, then it becomes simply a matter of hard bargaining on how much of an increase and to what programs are the increases allotted to.

Another new factor that the farm bill conference will have to consider is the enactment of the energy bill. That legislation included an increase in the renewable fuel standards, and authorized other initiatives to spur biomass fuel production. The conferees will have to review what the energy bill already has done, and tailor the farm bill energy title to compliment that legislation.

Finally, there is the intangible of the rapid rise in commodity prices recently. $4.40 corn, $10 wheat, and $12 soybeans at a time when production is not being decimated by natural disasters such as drought should give the Administration some ammunition in arguing for farm program reform that would cut back on Federal benefits. Of course, the counter-arguments can be made that high prices for commodities are being accompanied by high prices for inputs such as fuel and that commodity prices can turn south very quickly if world supplies expand. Nonetheless, with farmers enjoying market prices they haven't seen for 30 years and thus being much less dependent on government programs to cover their costs, the Administration will make hammer on the point that now is the time to enact program reforms that reduce spending.

In sum, look for the conference committee possibly to craft a farm bill that is a second generation to the House and Senate-passed versions--farm bill 2.0. Merry Christmas and happy holidays!    

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FARM BILL UPDATE: Senate Moving Quickly On Farm Bill, Could Finish Soon
Posted by: Phillip Fraas
December 13, 2007

After weeks of deadlock between Democrats and Republicans on the terms for the floor debate of the farm bill, agreement was reached last Friday on a plan for handling the bill and floor debate began in earnest this Monday. Since then, the Senate has worked its way through most of the proposed amendments to the committee-reported farm bill, and it now appears that the Senate is close to voting on final passage.

What has transpired this week is that the floor manager of the farm bill, Tom Harkin, Chairman of the Agriculture Committee, has worked out compromises on literally scores of amendments (there were close to 300 amendments being discussed at one time) and the legislative language for those compromises is being assembled into a giant manager's amendment that will be offered for unanimous consent approval just before the final vote in tbe Senate on passage of the bill. Amendments that couldn't be resolved amicably have been debated and voted on over the course of this week.

So far, the votes have gone in favor of the Agriculture Committee, that is, the Senate has rejected just about every proposal to change the language of the committee-reported bill. That includes the Lautenberg-Lugar substitute that would have replaced current farm payment programs with revenue insurance, the Dorgan-Grassley proposal to tighten payment limitation rules, and the Klobuchar amendment to reduce to $750,000 the adjusted gross income (AGI) limit on eligibility to participate in farm payment programs.

What likely will happen after the Senate finishes with the farm bill is that staff of the House and Senate agriculture committees, over the course of the next three to four weeks, will work jointly to develop conference committee documents that spell out the differences between the two versions of the legislation and then informal discussions on resolving conflicts between the two bills will commence. 

Formal convening of the conference committee can be expected as early as the third week in January, and the conferees will push to work through the differences quickly so the farm bill can be in place for the planting of the 2008 crops.

In general terms, it appears that the House and Senate have fairly similar bills so that, if it were left up to the two bodies by themselves, the conference would not be difficult. However, the legislation won't become law unless the President signs it, and right now his Administration is adamantly opposed to the revenue-raising measures included in both bills to pay for increased spending on such programs as renewable energy development, nutrition assistance, and soil and water conservation. Further, the Administration strongly believes that the AGI eligibility limit must be reduced more than either version of the bill now does. In fact, today, Acting Secretary of Agriculture Chuck Conner issued a statement decrying the Senate's rejection of the Klobuchar amendment to tighten the AGI limit. 

For right now, however, everyone interested in getting a new farm bill will breathe a small sigh of relief once the Senate concludes debate, in recognition that another big step will have been taken toward final passage.   

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FARM BILL UPDATE: The Senate Deadlock Might Be Broken
Posted by: Phillip Fraas
December 06, 2007

I've seen one report this evening that the deadlock between the Senate Democrats and Republicans on the rules for conducting the floor debate on the farm bill has been broken, and debate will start tomorrow.

I am traveling tomorrow, but will try to get more information over the next couple of days on what the prospects are for the farm bill in the Senate if tonight's report is true and get another update out as soon as practicable.

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FARM BILL UPDATE: Senate Deadlocked On The Farm Bill, Might Not Finish Work On It This Year
Posted by: Phillip Fraas
December 06, 2007

CURRENT SITUATION: Although interested senators and staff have been pushing hard over the past couple of weeks to reach an agreement on the number and scope of amendments that could be offered when the Senate brings up the farm bill again (the Democrats want to restrict amendments, the Republicans want a wide open debate), they have not been successful.

In an implicit recognition of the seriousness of the deadlock, Senate Majority Leader Reid yesterday filed a second cloture petition, which if approved by a three-fifths vote would defeat Republican insistence on the right to offer nongermane amendments to the farm bill, such as the alternative minimum tax (AMT) fix, and thus clear the way for speedy passage of the bill. 

The first cloture attempt last month failed when the Democrats got only four of the nine Republicans they need to invoke cloture; and there are no indications that they have picked up any new Republican votes since then. Yet, time is rapidly running out. Because the Senate has a lot of other unfinished business to dispose of before it leaves town for the holidays some ten or so days from now, it would not be surprising if Majority Leader Reid simply pulls the farm bill from the floor for the rest of the year if he doesn't get cloture tomorrow.

WHAT HAPPENS THEN? If the Senate fails to act on the farm bill this year, the first consequence will be that Congress likely will add to the omnibus appropriations bill it intends to pass next week provisions to extend current farm bill programs that are close to expiring, such as the dairy price support program. For how long Congress might extend current programs is hard to predict. One suggestion I recently heard was that the extensions might run through the end of March 2008, just enough time for Congress to complete work on the farm bill if they turn to it as soon as they return in 2008.

In that regard, Congress typically doesn't meet much in January--in fact, it has been reported that it won't even convene the 2008 session until January 15--so work on the farm bill might not start up again until late January at the earliest.

Further, the key members of the Senate leadership and the agriculture committee will have to continue working over the holidays to find a way to reach an agreement that will break this impasse preventing a vote on the legislation. Until that happens, then the farm bill will remain dead in the water even after Congress convenes in January.

However, an important point to keep in mind is that the current hold-up in the Senate has very little to do with the merits of the farm bill. It appears that the farm bill just happens to be a convenient vehicle for a test of wills between the Democrats and Republicans over control of the Senate's legislative agenda. Once that issue is disposed of, there is every reason to expect that the debate on the farm bill will move forward without delay. That would mean that Congress could put the new law in place before spring planting in the midwest.

If that happens, then the trials and tribulations the legislation is going through now will quickly be forgotten. Of course, the key word in the last sentence was "If." There is no certainty as to the path the farm bill will take in coming weeks and months. All we can do is hang on for the ride.

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