The clock is ticking, says Sen. Tom Harkin, and the Bush administration needs to show a little more flexibility if it wants farmers to have a new farm bill by the time the extension of the current law expires on March 15.
Harkin, D-Iowa, the chairman of the Senate Agriculture Committee, says he believes enacting a new farm bill by that date remains possible, but only if the White House relaxes its objections to what it calls tax increases and congressional leaders term “loopholes.”
“The administration has said it wants to work with Congress on a bipartisan basis to pass a farm bill the president can sign,” Harkin told reporters. “I take them at their word, but if an overwhelming majority of the Congress says we ought to close those loopholes to get some funding, I think the president is going to have to bend on this.”
In his Jan. 28 State of the Union address, President Bush said he would veto any bill that raises taxes. Two days later, Ed Schafer, the new agriculture secretary, repeated the administration's position, saying the president was opposed to any spending above the Congressional Budget Office agricultural baseline.
“You know the president's farm bill proposal was above baseline by $8.5 billion, but they never told us where they were going to get the money for that,” said Harkin, a Democrat from Iowa.
“So, no, that doesn't hold true,” he said. “And, again, you get into this thing about raising taxes. Is closing a loophole raising taxes? As I pointed out, that's what we did here in the Senate and it got 79 votes, 83 if the four presidential candidates had been there.”
Harkin said Sen. Kent Conrad, D-N.D., chairman of the Senate Budget Committee, and Sen. Max Baucus, D-Mont., chairman of the Finance Committee, have been discussing new ideas for offsetting the higher costs of the Senate farm bill, which would provide funding for a permanent disaster program and expanded nutrition, conservation and energy programs.
The Baucus revenue package the Senate passed as part of its farm bill contains provisions that would make changes in the tax code. One of those would reduce the recovery period for deducting the cost of farm machinery and equipment from seven to five years. It also creates tax credits for a number of conservation and renewable fuel activities.
The House bill, on the other hand, would pay for its funding increases for nutrition, conservation and energy programs by eliminating the exemptions for the U.S. earnings of foreign-owned corporations and increasing royalties oil companies must pay for offshore oil leases from the government.
The Senate bill passed by a 79-14 vote while the House bill passed by a vote of 231-191 after Republican lawmakers withdrew their support following the last-minute addition of the House bill's revenue proposals.
“Now you can't get much more support than that and that was for closing loopholes, supported by Republicans,” said Harkin, referring to the much wider margin of victory for the Senate bill. “So I don't know what the president's game is on this. The clock is ticking, and we have to move ahead.”
The Senate Agriculture Committee chairman said he thought the White House was softening its position on the adjusted gross income eligibility criteria for farm program payments. The administration supports reducing the AGI limit for farm program payments from the current law's $2.5 million to $200,000. The House and Senate bills lower the limit to $1 million and $750,000, respectively.
Harkin was asked about House Agriculture Committee Chairman Collin Peterson's comments that Congress might be forced to allow farm programs to revert to the “permanent” farm law if President Bush vetoed the House-Senate conference committee report once it is voted out of the House and Senate.
“I think the White House should think about that,” said Harkin. “No, it's not a bluff. If the farm bill expires because the president wouldn't sign a new law, then that is what very well could happen.”
Harkin said he hoped House and Senate leaders would name the members of the House-Senate conference committee that will be convened to resolve the differences in the House and Senate farm bills.