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Corn+Soybean Digest

New Limits Missing In Budget Plans

The chances the Obama administration – and some Midwest, farm-state senators – will be able to impose new limits on spending on farm programs appear to be growing dimmer for the 2010 fiscal year.

In his budget message earlier this year, the president said he wanted Congress to phase out direct payments to farmers with more than $500,000 in gross annual sales and limit total farm program payments to $250,000/individual. Neither of those provisions made it into the fiscal 2010 budget plans passed by the House and the Senate on April 3. Both were passed along party lines, by a vote of 55-43 in the Senate and 233-196 in the House. Sen. Charles Grassley (R-IA), offered an amendment that would have capped farm program payments at $250,000 during the Senate Budget Committee’s budget hearings. But three senators – Robert Byrd (WV), Patty Murray (WA) and Ron Wyden (OR) – changed their votes on the amendment, which the committee passed in 2008.

The turnaround, which led to the defeat of the amendment by a vote of 13-10, drew scathing criticism from environmental groups such as the Sustainable Agriculture Coalition that have been lobbying for stricter payment limits. The reversal was due, in part, to a series of letters written by Sens. Blanche Lincoln (AR), Saxby Chambliss (GA) and Pat Roberts (KS) asking senators not to reopen the 2008 Farm Bill, which the Senate worked on for more than two years and overrode two presidential vetoes to pass. Reps. Marion Berry (AR), Mike Conaway (TX) and Frank Lucas (OK) wrote similar letters to House members and Agriculture Secretary Tom Vilsack.

The president had said he wanted to increase spending on child nutrition programs by $1 billion with the savings on the $500,000 gross sales cap on direct payments and the more stringent payment limit ceiling of $250,000. The proposal would have pitted farm subsidies against programs for feeding children, two areas that farm organizations have fought for in tandem in the past. A portion of the Senate plan to cut spending on federal crop insurance subsidies by $350 million would go for child nutrition programs. The House budget plan does not include such language.

The two budget blueprints now will be reviewed by a conference committee, which must decide on whether to include provisions that would, like the House plan, allow health care overhaul legislation to move through the reconciliation process and how much in discretionary spending should be provided to the Appropriations panels to write the 12 annual spending bills. The Senate plan would provide the Senate and House Appropriations Committees with $1.08 trillion, which is $15 billion less than the president requested and about $8 billion less than the House resolution.

The Senate also endorsed, by a 51-48 vote, an amendment offered by Sen. Lincoln and Sen. Jon Kyl (R-AZ), which would reduce the estate tax rate to 35% and provide an inflation-adjusted $5 million/person exemption on the estate tax. The administration’s budget proposals and the payment limit legislation named for Sens. Grassley and Byron Dorgan (D-ND), could be offered again during the appropriations process but would have to generate more votes and support than in the just-completed budgeting process.

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