House Passes Massive Farm Bill

By Dan Morgan
Special to the Washington Post
Saturday, July 28, 2007

The House yesterday passed a far-reaching new farm bill that preserves the existing system of subsidies for commercial farmers and adds billions of dollars for conservation, nutrition and new agricultural sectors.

Passage of the 741-page bill by a vote of 231 to 191, after partisan battling unusual for farm legislation, was a major achievement for the new Democratic leadership.

With most Republicans opposing the five-year bill over a tax issue, House Speaker Nancy Pelosi (D-Calif.) hammered out a compromise that held together a shaky majority of Democratic farm-state lawmakers committed to the entrenched farm subsidy system, together with urban liberals and reformers seeking sweeping changes.

"This signals change and a new direction," said Pelosi, in calling for the party to stick together on the contentious vote.

The bill, which has a price tag of almost $286 billion, boosts spending on preservation of grasslands and wildlife habitat, and mandates a major study of the Chesapeake Bay watershed as a first step to restoring the bay by reducing agricultural and other wastes.

The measure updates the food stamp program, indexing benefits to inflation, increasing the minimum benefit and raising the standard deduction. Youth obesity is addressed by a program to introduce healthful snacks in schools, and more money is authorized for famine relief abroad.

In an important victory for consumer organizations, imported meat, including hamburger made from multiple animals, will be labeled by its country of origin starting in October 2008.

Pelosi also cited the bill's emphasis on credits and loan guarantees for new forms of biofuel produced from grasses and biomass. "Future farm bills will never look the same," she said.

Nonetheless, major hurdles remain before the massive legislation becomes law.

The White House, citing insufficient reforms of the subsidy system, has threatened a veto. Only 19 House Republicans supported the bill's passage because of the last-minute addition of a tax provision needed to offset the new Democratic-backed spending on food stamps and nutrition.

Rep. Robert W. Goodlatte (Va.), the ranking Republican on the House Agriculture Committee, accused Democrats of "poisoning the well" by adding the tax provision to what had been a bipartisan farm bill. Business lobbies, including the National Association of Manufacturers, warned that the action could discourage foreign investment and cost jobs.

Democrats said the provision merely closes a loophole that allows a limited number of U.S. subsidiaries of foreign companies to avoid taxes. Aides said it is aimed at companies headquartered in tax havens such as Bermuda, with which the United States has no tax treaty. Subsidiaries avoid a tax bite by funneling earnings through European countries that have reciprocal tax-reduction arrangements with the United States.

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