Posted by: Phillip Fraas
February 18, 2008
Topic: REPORTS ON 2008 FARM BILL STATUS--January 2008 To Enactment

For the past few weeks, it has seemed that farm bill negotiations were stalemated. The Bush administration strongly opposes two key elements of the bills that the House and Senate have drawn up: (1) their increases in farm bill spending and paying for the increases with revenue enhancements/new taxes, and (2) their failure to exclude from eligibility for farm program payments persons whose adjusted gross income exceeds $200,000 annually (the current AGI limit is $2,500,000). For its part, Congress seemed disinclined to give much on those two items.

But, a couple of weeks ago, a rumor surfaced that work was being done to develop a new farm bill proposal to get around the current deadlock. That rumor proved to be true as, early last week, the House agricultural leadership (Agriculture Committee Chairman Collin Peterson of Minnesota and the Committee's Ranking Republican, Bob Goodlatte of Virginia) unveiled a proposal they described as providing an example of a way to meet the Administration's concerns. They submitted this "Illustrative Outline" proposal to the Senate agricultural leadership for its consideration, which action has led to the initiation of serious talks between the House and Senate that might yet lead to a final farm bill package.

THE NEW PROPOSAL: What the House ag leadership proposed was to make the legislation a ten-year bill (the House and Senate-passed bills were five-year bills); limit the increase in farm bill spending to an amount that would be only $6 billion above baseline spending (baseline spending is the amount that would be spent if the current farm bill were extended without change, and even the Administration's farm bill proposal would have increased spending $5 billion over the baseline); and not include any revenue enhancers/new taxes in the bill. Beyond that, it would reduce the AGI cap to $900,000 for everyone, and to a lower level for persons who earn less than 2/3 of their income from farming. The lower level would be phased in, starting at $500,000 for 2009 and ending at $300,000 in 2013.

To get to the spending target it set, the proposal would essentially extend current farm price and income support programs and reduce the increases in spending for nutrition and fruit and vegetable farmers proposed in the earlier Senate and House measures. As an enticement for the Senate, the proposal would provide conservation spending and authorize a permanent disaster program.

Above all, the House agriculture leadership stressed that the proposal was not a proposed offer but merely suggestions to be used to begin negotiations. Further, they emphasized that it was a proposal drawn essentially with one thought in mind--to produce something that the Administration could live with.

REACTION SO FAR/WHAT TO EXPECT: The Administration quickly came out praising the House for its work on the proposal, and urging House and Senate farm bill conferees to use it as the basis of negotiations.

Reaction from farm and commodity groups has been generally negative because it would cut back on proposed farm bill spending and its AGI proposal would be too harsh. However, for the most part, these organizations were relatively temperate in the wording of their objections, suggesting that they thought putting something on the table to talk about was better than just doing nothing.

Reports are that the proposal wasn't at all well received on the Senate side, but it did spur the Senate Agriculture Committee Chairman Tom Harkin of Iowa and Ranking Republican Saxby Chambliss of Georgia to send a counterproposal to the House late last week, one that would increase spending over the baseline by $12.3 billion. Although the details of the Senate counter haven't been made public, the Administration quickly issued a statement opposing it. However, it is understood that the House is looking at it with great interest. That is where things stand now.

Even though Congress is in recess this coming week, the next few days could be make-or-break time for getting a farm bill done on time. The March 15 deadline for action on the farm bill is fast approaching (March 15 is when the current farm bill effectively expires), and the conferees have to move fast to go through and resolve the many hundreds of differences between their two versions of the farm bill in the next four weeks.

However, with the House and the Senate now with bipartisan compromise proposals on the table concerning the big issues--compromises that at least go some way toward addressing the Administration's concerns--there is reason to hope that, with some serious horse-trading in the next few days, the way will be cleared to get final passage of a new farm bill by March 15. I look for the horse-trading to get underway immediately, if it hasn't already started.

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FARM BILL UPDATE: Deadlock In Negotiations Might Be Broken

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