As Farm Bill Nears Vote, Bush Presses for Fewer Subsidies

By Dan Morgan
Special to The Washington Post
Sunday, May 4, 2008

President Bush's decision in 2002 to sign a farm bill loaded with billions of dollars of new agricultural subsidies triggered considerable criticism from GOP conservatives true to the party's anti-spending philosophy.

Now, as Congress nears final agreement on a new five-year farm bill that will cost nearly $300 billion, the president has taken a harder line. Emboldened by soaring food prices and record farm profits, he has pressed Congress to cut farm subsidies sharply and has made clear that he will veto the popular bill if lawmakers do not meet his demands.

Congressional negotiators hope to take a final, compromise version of the legislation to the floors of the House and Senate this week, then send it to the White House.

In remarks Tuesday, Bush criticized the "massive, bloated farm bill that would do little to solve the problem" of high food prices. "This is the right time to reform our nation's farm policy by reducing unnecessary subsidies," he added.

The same day, Agriculture Secretary Ed Schafer and his top deputy presented lawmakers with a list of requirements that they said are not negotiable.

Top priorities for the White House include tightening limits on federal farm payments to wealthy individuals; closing a loophole that allows farmers to sell crops above the support price and still collect a subsidy; modifying a plan that would guarantee U.S. sugar growers 85 percent of the domestic sugar market through government purchases of excess imported sugar; and adjusting U.S. farm policy to bring it into compliance with international trade treaties.

Insistence on change by an administration often seen as siding with the wealthy is allowing Bush to display a populist side and to emphasize the GOP's commitment to fiscal restraint heading into this year's election.

As currently written, the measure continues or increases most of the crop subsidies contained in the widely criticized 2002 legislation. Administration officials have missed few opportunities to rail against loopholes that allow "rich individuals on Park Avenue" to collect farm subsidies. Congress, they say, has been tinkering around the edges in deference to the politically powerful farm bloc.

House Speaker Nancy Pelosi (D-Calif.), who is looking to reestablish Democratic ties to rural America, supports the farm bill. Congressional Democrats and key farm state Republicans said they have stretched to meet White House demands and close loopholes. Lawmakers noted that the White House itself supports continuing a program that will channel $5.2 billion a year to farmers, even if prices stay high.

"We literally could not pass the bill on the floor if we did everything the White House wants," said Rep. Earl Pomeroy (D-N.D.).

Rep. Collin C. Peterson (D-Minn.), who chairs the House Agriculture Committee, warned last week that it would be "political suicide" for Bush to veto the bill in an election year. Tucked into the bill are a $10.4 billion increase for food stamps and nutrition programs, incentives for the production of biofuels, and more money for conservation programs, organic farmers and Chesapeake Bay cleanup.

Senior Democratic congressional aides who are not authorized to speak on the record said the White House may figure that a veto could strengthen the GOP's standing with independent voters angry about pork barrel spending and waste in government. Sen. John McCain (R-Ariz.), the presumed Republican nominee for president, is a longtime critic of farm programs.

For House Republicans from rural areas, however, a veto would pose tough choices. Last July, all but 19 voted against the House version of the farm bill after Democrats added tax increases to finance the package. Although the tax provisions have been removed from the current version, GOP lawmakers still could face pressure to support a presidential veto.

The veto calculus came into play Thursday night when House Democratic conferees tried to add a provision that would have prohibited private contractors from managing food stamp programs for state governments. Sen. Kent Conrad (D-N.D.) warned that the measure would draw a veto that House Republicans would feel bound to support.

Conrad then voted against the Democratic initiative, helping to kill it. "He is opposed to privatization of food stamps, but he did it to save the farm bill," said spokesman Sean Neary.

Current rules allow farmers to collect federal subsidy payments if their adjusted gross incomes are as high as $2.5 million. The administration favors ending payments completely for those whose adjusted gross incomes from non-farm sources is above $200,000. The purpose is to cut the wealthiest farmers from the 70-year-old subsidy system, considered increasingly outdated as farms have consolidated and grown.

Last week, congressional negotiators proposed a $500,000 cutoff. Under that proposal, however, a person still could earn as much as $950,000 from farming operations before any reduction of direct payments. Those payments would not end entirely until farm income rose to $1.95 million.

At the same time, the lawmakers have proposed increasing maximum direct payments from $40,000 to $50,000 a year.

"This is not reform and does not move Congress closer to a plan the president would sign," said Chuck Conner, deputy agriculture secretary.

Ferd Hoefner, policy director of the Sustainable Agriculture Coalition, noted that negotiators also had approved a 2 percent across-the-board reduction in direct payments, but that farmers above the income cutoff would escape that provision.

"The rich get richer, and the rank and file fade away," he said.

Peterson acknowledged Friday that the formula presents problems. "We still don't have this nailed down," he said. Progress, he added, has been slowed by uncertainty over what would satisfy the White House.

Last week, negotiators also weakened key environmental legislation, which could lead to some fraying of support.

Legislation approved by the House and Senate would have denied subsidized crop insurance to farmers who plow up virgin prairie to plant crops. That provision, aimed at protecting prime bird habitat, was changed to allow state governors to decide whether to implement the program.

Dan Morgan is a contract writer for The Post and a fellow at the German Marshall Fund, a nonpartisan policy institute.

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