Posted by: Phillip Fraas
March 02, 2008
Topic: REPORTS ON 2008 FARM BILL STATUS--January 2008 To Enactment

About three weeks ago, final negotiations on a new farm bill got a big boost when the House Agriculture Committee tabled a proposal that the Administration supported to resolve the deadlock over how much to increase farm program spending. While members of the Senate Agriculture Committee opposed the House proposal as not providing sufficient new spending, it did serve a valuable purpose in spurring discussions that appear to have been successful in getting negotiators to agree, a little over a week ago, on a number for increased spending. Since then, however, we have seen no further progress as the search goes on for a funding mechanism to pay for this new farm program spending. When and whether that search is successful is up in the air; but Congress is facing a March 15 deadline to at least come to an agreement in principle.

The House proposal called for about $6 billion in new farm program spending over the next ten years, but didn't specify where the money would come from. That number was sufficiently close to the Bush Administration's farm bill proposal of $5 billion in increased program spending that, not surprisingly, the Administration quickly came out in support of the House initiative, even though it didn't have a funding mechanism to pay for the new spending.

The one thing that seems radioactive to the Administration in this regard is any funding proposal that could be viewed as "new taxes," that is, any proposal that would directly increase Federal revenues. The Administration has preferred, instead, to deal with increased farm program costs by taking offsetting reductions in other USDA spending.

Reports are that the Senate agricultural leadership believed strongly that the $6 billion was not enough of an increase to meet all legitimate needs that have surfaced as Congress considered what new farm programs and changes in current programs to include in the farm bill. After talks the week before last, they convinced their House counterparts and, by the end of that week, the negotiators appear to have arrived at $10 billion as the right number for the spending increase. And, significantly, the Administration did not quickly send out a message that it would recommend a veto if the farm bill included such an increase.

All well and good, but then the task turned to funding the $10 billion increase. Essentially, there are only two ways to do it--find revenue enhancers that pass the Administration's "no new taxes" test or reduce spending in other USDA programs to offset the increase. Negotiators have spent the last week exploring the former--to no avail so far.

This is not an insurmountable problem to solve, it's just a matter of how long it will take. But, some current farm bill programs expire on March 15. Beyond that, farmers all across the country are beginning work on their 2008 crops and need to know soon what the program rules will be.

Thus, the farm bill--if it is to be effective for the 2008 crops--has to be signed into law this Spring. And, to deal with the more immediate March 15 deadline, the negotiators must at least reach agreement in principle on how to solve the funding problem by that date. If they do so, they can get through stop-gap legislation to extend the curent farm bill another few weeks beyond March 15 while they work on the non-money differences, and prepare the final draft of the new farm bill. In the mean time, those interested in getting a new farm bill passed will be biting their nails as the March 15 deadline approaches.

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FARM BILL UPDATE: Negotiations Bogged Down Over Funding Mechanisms

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