FARM BILL DEBATE CONTINUES AMID VETO THREAT
WASHINGTON, D.C. -- The Senate enters its second day of debate on the 2007 farm bill today amid a threatened veto by the Bush administration, which criticized the Senate bill as jeopardizing World Trade Organization talks because it fails to cut farm subsidies enough.
Senate Agriculture Committee Chairman Tom Harkin and Ranking Member Saxby Chambliss began the debate on Monday with opening statements about the bill's importance to U.S. food security and the bipartisan nature of farm bill debates in the past.
However, the Bush administration had the last word of the day when, in the late afternoon, Acting Agriculture Secretary Chuck Conner issued a veto threat of the Senate farm bill, although it was still far from clear what the bill would actually look like when the Senate got done with it.
Conner said he and other senior advisers to President Bush would recommend the action. The White House has not officially commented yet, but the administration has also threatened to veto the House-passed version.
USAgNet.com reported that Conner said the administration was concerned about an increase in farm bill spending and tax increases that Congress has devised to pay for them. Most of the spending increases are in the nutrition, conservation and energy titles of the bill, not the commodity title.
According to the Associated Press, Conner criticized as "budget gimmicks" a delay in some payments to farmers until after the five-year life of the bill. He also criticized a proposed crackdown on tax shelters under the "economic substance" doctrine.
According to that measure, reported USAgNet.com, for a company to claim a tax deduction for a specific transaction, the transaction must yield a profit or have some other clear economic benefit separate from the tax effect.
"We believe this bill simply makes a mockery of the budget process," Conner told reporters.
Meanwhile, the AP quoted Conner as saying the $288 billion package would "paint a bull's eye on the back of American farmers" by raising some thresholds that trigger payments to farmers. That could threaten World Trade Organization talks, he said.
The AP also reported that Harkin said he's "hopeful we will be able to work through many of the administration's concerns."
The Senate legislation does attempt to limit subsidies by eventually banning payments to "nonfarmers" whose income averages more than $750,000 a year. The bill defines farmers as those who earn more than two-thirds of their income from agriculture.
There would be no income-based limits on what a farmer could collect, though the bill would ban individual farmers from collecting payments for multiple farm businesses.
The House measure, passed in July, would ban payments to all who earn an average $1 million a year or more. The administration has proposed reducing payments to individuals who make more than $200,000. The current cap is $2.5 million.