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Harkin: Payment limit fight may go to Senate floor

Senate Agriculture Committee members appear to be at loggerheads on new payment limit language in the 2007 farm bill, a situation that could mean any new rules would be debated on the Senate floor.

Committee Chairman Tom Harkin reportedly has told fellow Iowa Senator Charles Grassley he will include Grassley's payment limitation legislation in the chairman's mark he presents to the committee in October.

The legislation, which has been introduced in previous years by Grassley and Sen. Byron Dorgan, D-N.D., would bar any farmer and his spouse from receiving more than a total of $250,000 in direct, counter-cyclical and marketing loan gains or loan deficiency payments per year.

But Harkin told reporters listening in on his weekly telephone press conference that the fate of the Grassley-Dorgan language in the Senate Agriculture Committee version of the farm bill is uncertain.

“I don't know yet,” he said in response to a question about Grassley-Dorgan. “Again, this is one of those things we're trying to work out.”

Harkin, Grassley and other Midwest members have indicated they support stricter payment rules, but Southern senators, including Saxby Chambliss, the ranking member from Georgia, Blanche Lincoln, D-Ark., and Thad Cochran, R-Miss., are opposed.

Most observers believe that if Harkin had the votes for the Grassley-Dorgan language — and budget offsets from the Senate Finance Committee — he would have already scheduled a mark-up session for the new farm bill.

“Keep in mind, it may be the floor of the Senate where we actually get it done,” he told reporters, indicating he isn't sure a majority of the members of the Senate Committee on Agriculture, Forestry and Nutrition will approve the new limits.

Harkin was also asked his thoughts about the adjusted gross income eligibility criteria in the House-passed farm bill. The latter denies payments to anyone who reports more than an average of $1 million in adjusted gross income on his federal income tax return over three years.

While he declined to give a figure, Harkin said the Senate bill could include an AGI limit between the House's $1 million cutoff and the $200,000 AGI limit in the Bush administration's farm bill proposal. (The House bill also denies payments to anyone with an AGI of more than $500,000 who earns less than a third of their income from farming.)

He also said he thought it was possible the ag committee farm bill could provide farmers with both a permanent disaster assistance program and a revenue-based counter-cyclical program.

“I think there is a way to do a revenue CCP and have a modest disaster assistance program,” Harkin said. “I think we can accommodate both, and I plan to do so.”

Senate Finance Committee Chairman Max Baucus has said he is working on an agricultural tax package that would create a permanent trust fund for disaster relief programs and tax credits and other incentives for conservation and rural development efforts.

In recent days, Baucus, a Democrat from Montana, has said he hasn't fully nailed down the sources for the agriculture tax package, but he is hopeful the finance committee would act in the next two or three weeks to report out $8 billion to $10 billion in new agriculture-related tax proposals.

Harkin welcomed the proposal, saying the agriculture committee needs additional funding and that Baucus, as a member of the finance and agriculture committees, understands “our difficult budget situation.

“We are continuing discussions regarding both the details of the finance committee's ideas and the level of funding help they would provide toward the farm bill,” Harkin said.

“We still have a way to go to meet crucial needs for farm income protection and investments in conservation, nutrition, energy, rural development and specialty crops initiatives.”

Congress has approved a fiscal year 2008 budget resolution that contains a $20-billion reserve fund for new farm bill spending over the next five years.

The resolution also said any new spending — above the baseline — must be deficit-neutral or have to be offset by spending cuts in other programs or increasing taxes.

The Congressional Budget Office, whose baseline budget serves as the benchmark for the FY2008 budget resolution, projected spending for commodity support payments to be $42.4 billion for the 2008-2013 fiscal years. That figure is about $30 billion lower than the last six years.

Harkin has said he may need as much as $20 billion to fund a bill that will win enough votes to pass the Senate Agriculture Committee and the Senate. He said ag committee members have been meeting for two months to discuss ways to obtain the funding.

Baucus' tax package would include a permanent agriculture disaster relief trust fund that could help ranchers and farmers crisis and encourage banks to extend credit as needed. It would provide an ongoing program to offset farming income losses not covered by the crop insurance program.

Iowa Sen. Grassley, the finance committee's ranking member, has said he also favors establishing a trust fund to pay for permanent disaster relief. Money for the fund would come from tariffs USDA now collects on agricultural imports, according to Grassley.

Sen. Kent Conrad, D-N.D., and chairman of the Senate Budget Committee, says a number of senators have begun throwing their support behind a permanent disaster measure.

“If we're going to keep family farmers and ranchers on the land, then we need to make a permanent disaster program a reality,” said Conrad. “Our farmers and ranchers need timely assistance when they face deep crop and livestock losses from disease, flood, frost or other natural disasters.”

Conrad said the permanent disaster program would be fiscally responsible and “would cost less than passing ad hoc disaster measures, as we have done in Congress for years.” (Since 1998, Congress has passed 23 agriculture disaster measures, the most recent this spring after a two-year effort by Senator Conrad to bring aid to ranchers and farmers in North Dakota.)

Joining Conrad at the press conference promoting the proposal were Baucus and Senators Orrin Hatch, R-Utah, Ken Salazar, D-Colo., John Thune, R-S.D, Jon Tester, D-Mont., and Dorgan and Nation al Farmers Union President Tom Buis.

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