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President's advisors against current Senate version of farm billBy Jennifer M. Latzke While the U.S. Senate began debate of its version of the farm bill on the floor, Nov. 5, Acting Secretary of Agriculture Chuck Conner spoke to reporters about the administration's significant concerns about the bill as it stands. Chief among the administration's issues with the bill is its $37 billion in new taxes and "budget gimmicks." "This bill increases trade-distorting support instead of lowering it, continues a defective safety net, contains little real reform, and uses tax increases and budget gimmicks to pay for priorities that deserve to be funded in an honest fashion," Conner said. Unless the bill can be changed to reflect good fiscal and farm policy, the President's senior advisors will recommend a veto of the combined Senate Finance Committee and Senate Ag Committee Farm Bill, Conner added. Funding a farm bill The funding issues of the bill seem to be the biggest hurdle to the administration's approval. As it stands, Conner said, the bill contains nearly $22 billion in budget gimmicks and nearly $15 billion in new taxes. "This bill might appear to meet the pay-go rule on paper, but it certainly doesn't meet the spirit of this rule," he said. The bill has $7 billion in shifted commodity payments and another $3 billion in shifts in crop insurance payments, he added. "Shifting payments from one fiscal year to the next so those payments are outside the 10 years that the dollars are counted for budget purposes is simply and frankly dishonest," Conner said. Also under contention is the nearly $12 billion in unfunded commitments such as $7 billion for the Food Stamp program and $5 billion for disaster aid. "This bill promises farmers that if there is drought-assistance, it is provided, unless the drought hits them in 2013 when this funding is zeroed out," Conner said. " They promise some of the most vulnerable people in our society additional help buying food which they can count on for five years, but those additional benefits would be taken away in 2013 under the bill as drafted because the funding is also taken away." As for the tax increases, the Finance Committee bill, which will be added to the farm bill, raises nearly $15 billion in new taxes to pay for new programs, which the administration is firmly set against. "We don't believe other sectors should be asked to pay additional taxes for farm programs, especially when the current bill continues providing farm subsidies to millionaires living on Park Avenue," Conner said. If Congress does approve the funding, Conner stated Americans won't support the need for a strong farm safety net in this or future farm bills. Differences from Administration version Earlier this year the Administration had to face the same funding arguments against its farm bill recommendation. At the time the recommended farm bill would have been $5 to 9 billion over budget. Conner explained that while that version did ask for an additional $5 billion of new money over the baseline, the money came out of other federal spending, not additional taxes. "We worked very closely with the OMB director and received that additional $5 billion," Conner said. The administration also objected to the House bill's $7.5 billion of new taxes on the same grounds that the money was coming from tax increases, and not from cuts in government spending. Conner told reporters that he thought passing a farm bill that increases taxes to pay for its programs sets a bad precedent. "When we now have the day where farm bills require us to go and ask others to dig more deeply into their pockets, that's going to make passing future farm bills very, very difficult," he said. "I might even say it probably jeopardizes future farm bills. "Agriculture should be living within a budget," he added. "I think future Secretaries of Agriculture should be in a position to strongly defend the safety net." Reform will be key Reform is the key to getting Administration approval, Conner said. "Good farm policy we believe has to be one that deals with the issue of beneficial interest of farm program payments," Conner said. "This is an issue that has allowed producers to collect too much in payments during times when they need it the least." Conner added that a good farm bill will tell the wealthiest 2 percent of Americans that they will not be eligible for farm program payments that use tax dollars coming from middle income Americans. International trade policy will also have to be a consideration when a final farm bill is created. Specifically, loan rates and target prices can't be increased, Conner said. "The implications of that in terms of market situation, in terms of trade policy are just enormous," Conner said. "I have described it before as us painting a bull's eye on the back of our farmers, in effect asking others to challenge our farm programs and the legality of those. This is not a sustainable farm policy for the future." When the Statement of Administration Policy is released, there will be several issues addressed. One of which will be the livestock title of the bill, which includes provisions banning packer ownership, a new allowance for small packers to ship meat across state lines and also addresses COOL. "We do strongly oppose that so-called 'special counsel' for competition provision," Conner said. "We really believe that provision works adversely. We also would strongly oppose the prohibition of any packer ownership or provision regulating production contracts of any kind that may or may not end up being part of this package as well." As for COOL, the administration is still opposed to mandatory labeling, although Conner said the USDA will administer what Congress has passed. When asked what a vetoed farm bill would do to the outcome of the 2008 presidential election, Conner avoided getting into the political fray. He did state that he wants to get this farm bill completed and that an acceptable one can be sent to the President if the Senate and House make some changes. A veto threat of both the House and Senate versions could push Congress to work with the President, Conner said, in order to get a fiscally responsible bill passed this year. Jennifer M. Latzke can be reached by phone at 620-227-1807, or by e-mail at jlatzke@hpj.com. 11/12/07 Date: 11/8/07
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