The Farm Bill extension went down to the wire before President Bush signed another one-week extension that expires May 2. Lawmakers were able to reach a tentative agreement today that legislative aides will work this weekend to hammer out before the new deadline.
An intense series of closed-door bargaining sessions over how to pay for the five-year, roughly $280 billion bill ended Friday afternoon with senior Democrats expressing optimism that they would soon be sending the measure to President Bush.
“I don’t think there’s any question now that we can get this done by the eighth of May,” said Rep. Collin C. Peterson, the Minnesota Democrat who heads the Agriculture Committee.
A key breakthrough came when senior lawmakers, after an hours-long huddle in an ornate room in the Capitol, agreed on a $1.7 billion package of tax breaks to be included in the bill, and on how to finance the overall package.
The outline includes an $861 million increase for nutrition programs, partially paid for by slashing crop subsidies by $400 million and cutting a program to pay farmers for ruined crops by $250 million.
It also reflected the political and economic realities surrounding this year’s tough farm bill talks. With crop prices high and the federal budget squeezed, there’s less appetite in Washington for big farm programs, especially among congressional leaders who hail from urban areas. The sharp economic slump has many lawmakers focused more on job losses and home foreclosures than farm policy.
To close stubborn funding gaps, negotiators agreed to cut an ethanol tax credit that has previously been seen as untouchable because of its popularity in politically potent Iowa. They sliced $1 billion in support for blending fuel with the corn-based additive, bringing the per-gallon credit from 51 cents to 45 cents. They boosted support for another form of the clean-burning fuel additive — cellulosic ethanol, which is made from plant matter — by $400 million.
The tentative deal includes a $3.8 billion disaster package, trimmed from the $4 billion farm-state lawmakers had initially sought.
The tax package includes several elements sought by powerful lawmakers, including a tax break for race horse owners important to Sen. Mitch McConnell, R-Ky., the minority leader, and one that benefits timber companies championed by Baucus. Also included were trade preferences for Caribbean countries, a priority for Rangel, whose district has a high concentration of people of Caribbean descent.
Negotiators were still working to finalize provisions limiting farm subsidies for the wealthy. Under the tentative deal, the government would eventually limit payments to high-earning “nonfarmers,” people who make only a small portion of their income from farming. But it wouldn’t impose any income limits on wealthy farmers, Peterson said.