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Johanns Threatens Farm Bill Veto Over Lack of Reforms

The Administration threatens to veto the House Ag Committee's farm bill unless certain changes are made.

Agriculture Secretary Mike Johanns on Wednesday told reporters Wednesday he would recommend that the president veto the House farm bill if it is approved by Congress.

He charged that in the past 12 hours, it appears that the House Ways & Means Committee will fund some spending in the farm bill, H.R. 2419, from proposed tax increases on foreign-owned businesses operating in the U.S.

"It is unacceptable to raise taxes on some businesses to pay for a bill that contains almost no reforms," Johanns said on a press call this morning.

• The H.R. 2419 eligibility clause that would exclude farmers with more than $1 million in adjusted gross income from farm programs. Johanns said that is too high compared to the $200,000 cap sought by the Administration, which would have "graduated" 38,000 farmers out of farm programs;
• The failure to eliminate a legal loophole in the 2002 farm bill that allows farmers to sell grain at high market prices after collecting the maximum loan deficiency payment;
• Raising loan rates on 14 of the 25 eligible crops and increasing target market prices on 12 of the 17 eligible crops. "This clearly represents a step backward," Johanns claimed, adding the marketing loan program is the most trade distorting under WTO obligations. USDA proposed rates at 85% of a five- year average, taking out the high and low years, the same proposal the House approved in 2002;
• Paper savings of $4.7 billion in savings Johanns believes are "budgetary transfers" rather than real savings to offset the bill's expenditures, and
• Failure to sufficiently fund spending for rural development and beginning farmers.
House Agriculture Committee Chair Collin Peterson, D-Minn., issued a statement in response.

"This Farm Bill is supported by a broad spectrum of agriculture, conservation, nutrition and renewable energy advocates. It represents a carefully crafted compromise that includes substantial reforms and new investments in programs that matter, including fruit and vegetable production, nutrition programs, conservation and renewable energy. Our bill implements Country of Origin Labeling, improves food safety, and paves the way for energy independence while preserving the safety net that our farmers and ranchers need."

The House Agriculture Committee put together a balanced, fiscally responsible Farm Bill, and I am confident that the House of Representatives will stand with us in supporting this important legislation."

The formal Bush Administration official statement of policy was issued minutes after Johanns' press call this morning. The four-page document outlining Administration concerns is online at:
H.R. 2419 goes to the House Rules Committee this afternoon to determine how many amendments will be heard during floor debate. Johanns indicated that amendments are prepared to address his concerns and that President George Bush favors completion of the farm bill this year rather than an extension of the 2002 farm bill. The current farm bill expires Sept. 30.

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