In an atmosphere of confrontation backed by veto threats, the Senate took up the multibillion-dollar farm bill yesterday and President Carter promptly held out a $446 million olive branch.
Spokesmen for the White House offered to boost the price-support ante by $446 million for wheat farmers on this year's crop if the Senate, in exchange, would reduce its proposed future wheat and corn supports by up to $1.8 billion a year from 1978 to 1982. It was not immediately clear whether the President would have any takers.
"You mean he wants us to go down?" asked Sen. Quentin N. Burdick (D.N.D.), whose state is a major wheat producer. "I want to raise it." Sen. Hubert H. Humphrey (D.Minn.) said, "I told them [White House officials] right off I would not offer their amendment."
The bill sets out support policies for eight major crops and revises the food stamp program, but the big conflict is over wheat and corn price guarantees to be given farmers by the government.
Carter fears that if price guarantees are set too high, the cost of wheat and corn supports to the government, assuming good weather, could skyrocket to $3.9 billion a year over the next half decade, shattering any chance to realize his dream of balancing the federal budget by 1981.
But members of the farm bloc argue that farmer costs are rising rapidly, market conditions are depressed and farmers need high price guarantees to stay in business.
If the farmer's selling price is lower than the guarantee level, the government pays him the difference.
Carter revised his proposed wheat and corn guarantee levels upward once to mollify farm bloc members of Congress, but the levels set by the Senated Agriculture Committee are far higher.
Carter's revised proposal of April 19 called for wheat guarantees of $2.47 a bushel for 1977 and $2.90 a bushel thereafter, with adjustments based on cost after that. The Agriculture Committee recommended going up to $2.90 in 1977 and $3.10 through 1982. Each penny in increased supports is estimated to cost taxpayers $18 million.
On corn, Carter's April 19 proposal was $2 a bushel in 1978, with cost adjustments after that. The committee recommended $2.28. Each one-cent increase costs $50 million.
Agriculture Secretary Bob Bergland said the President would veto the bill if those figures aren't pared down.
Yesterday, presidential spokesmen passed the word that if the Senate would drop its 1978-82 figures back to the levels asked by Carter, the President would agree to raise wheat to $2.65 a bushel for 1977, which would mean about $446 million this year for wheat farmers; and he would also sign the bill.
But it was uncertain whether the Senate would buy that proposal - at least right now. "It seems like the agriculture bill is the place where Congress really tests the mettle of any President and finds out whether his threats are real," said one farm expert.
A vote on the proposal could come today. Several senators said privately there will be plenty of time to drop the higher figures in conference with the House, whose Agriculture Committee has reported out a bill closer to the President's figures (though higher than what Carter proposed), if senators become convinced that Carter's veto threat is serious.
The difficulty of the pricing problem is illustrated by two economic calculations shown in the Agriculture Committee report.
Under a "favorable weather scenario," calculated as one possibility over the next five years, the price-guarantee system in the Senate bill would average $3.9 billion a year in government costs (three-quarters for corn and wheat).
Under a "variable weather scenario," duplicating patterns of the past five years, the 1978-82 cost might be as low as $2 billion annually, because of a smaller crop and higher prices.
If Carter could count on this second "scenario," he probably would not mind the higher guarantee levels, since they would add far less to his budget. But while the Agriculture Committee can talk about the weather, there really isn't much it can do about it.