The Senate approved a massive emergency aid package for America's struggling farmers yesterday, a record $7.4 billion response to free-falling commodities prices, brutal droughts and intense political pressure.
Congress passed an unprecedented $6 billion rescue package for farmers just last fall, a measure that was touted as an extraordinary one-time fix. But the Senate went even further yesterday, showering cash on farmers of grain, soybeans, livestock, dairy cows, tobacco, cotton and "specialty crops" to compensate for historically depressed prices.
There was a crisis mentality in place on the Senate floor, as farm state members of both parties gave impassioned speeches about an agricultural crisis some believe is the worst since the Great Depression. But by day's end, bipartisan negotiations over an even larger farm rescue measure fell apart, as many Democrats complained the final Senate package -- approved 89 to 8 -- was too meager. The $7.4 billion was added to a $68 billion agriculture spending bill approved later by voice vote.
Fiscal conservatives warned that with the August recess approaching, Congress is sending the message that its generosity to farmers knows almost no bounds. The Senate measure would swallow more than half of next year's projected $14 billion budget surplus. In fact, it has become doubtful that there will even be a surplus, given the amount of emergency spending Congress appears set to approve.
"We're getting into a bidding contest here because everyone wants to . . . say they helped farmers," said Sen. Phil Gramm (R-Tex.), a budget hawk who argued that Congress should wait to see how the harvest develops before taking "dangerous" action. "We're spending this surplus as fast as we can spend it."
Many senators argued that given the crisis, there is no time for delay. Projected farm incomes are down 16.5 percent since 1996. Commodity prices are even lower than they were in the mid-1980s, the era of Farm Aid concerts and tractor convoys on Capitol Hill. In South Dakota, 2,000 farmers have gone under in the last year. In North Dakota, foreclosures are so common that farm auctioneers are being summoned out of retirement.
"People are really hurting," said Sen. Thad Cochran (R-Miss.), the author of the $7.4 billion package. "It's urgent for us to deliver this assistance as quickly as we can."
In fact, to solidify support for his plan, Cochran had to add a last-minute $400 million boost in crop insurance payments, after an earlier agreement to include $328 million in payments to tobacco farmers. Republicans had hung together against Democratic proposals for $10.8 billion and then $9.8 billion in overall relief, but an $8.8 billion compromise between Sen. Kent Conrad (D-N.D.) and Sen. Charles E. Grassley (R-Iowa) drew a handful of GOP votes.
The haggling was a jarring reminder that the bold free-market rhetoric that inspired the GOP's 1996 overhaul of American agricultural policy tends to dissipate when times are tough on the farm. The Freedom to Farm Act was supposed to replace a government-heavy system that guaranteed farm incomes with a market-oriented system that introduced risk, but politicians seem anxious to look sympathetic during market downturns. Even Freedom to Farm included some cash payments to farmers who used to benefit from price guarantees, and yesterday's measure would temporarily double those payments next year.
With the House expected to push for a similar emergency measure after the August recess, Congress is on a course for its second-highest agricultural spending level in history, and the White House yesterday still dismissed the GOP package as "clearly inadequate."
"Last year, after the big package, everyone said, well, it's an election year," said agricultural economist David Juday, of the conservative Hudson Institute. "But this year, they're going to spend even more. It's like they can't help themselves."
This year, American farmers have been pummeled by a variety of forces. Farm prices have been depressed by a worldwide commodities glut, with wheat stocks doubling, soybean stocks tripling and corn stocks quadrupling since 1996. Meanwhile, the Asian financial crisis and the closure of European markets have battered American exports. Some farmers also have been buffeted by droughts, floods and crop disease. And the Freedom to Farm Act has ended guarantees that once ensured farmers steady income even in off years.
As a result, many farmers are selling their crops for less than they cost to produce, and as Vice President Gore mused at a news conference Tuesday, the old joke about making it up in volume no longer seems funny. At the event, Les Pruitt, a Martinsville, Ind., farmer, put a human face on the crisis, explaining that he is on the brink of bankruptcy after three rejections by loan officers. He may lose a 1,500-acre farm that has been in his family since 1942.
"For me, time is of the essence, and I am not alone," said Pruitt, who has been battered by a 45 percent drop in corn and soybean prices over the past five years. "Thousands of farmers and ranchers are depending on Congress to act. We need help now, not later."
Senate Democrats have been pushing that theme for several months. Twice this spring, they tried to tack emergency aid packages onto budget bills. Twice they failed. But over the past two days of debate, they have intensified their rhetoric, issuing grave warnings about rising suicide rates in farm states, complaining that Republican solutions were inadequate, and accusing the GOP of destroying the agricultural safety net with the Freedom to Farm Act.
After failing to pass their costlier amendments, Democrats reluctantly went along with the Cochran plan. They complained that it underfunds disaster aid for family farmers devastated by the drought and overfunds well-heeled commercial farming operations. But while they vowed a separate fight to dismantle Freedom to Farm, they said the GOP aid was better than no aid.
"It's like throwing a short rope to someone drowning in deep water," said Sen. Byron L. Dorgan (D-N.D.), who sponsored the more generous $9.8 billion plan. "But maybe the American people will weigh in, and they'll find some more money."
The problem is, even with all the recent talk about projected budget surpluses, there isn't that much money around. The Congressional Budget Office recently warned that GOP appropriations bills are $17 billion over their stated costs, which would wipe out next year's surplus even without farm aid, tax cuts or $4.5 billion in proposed "emergency" spending on the 2000 census, which the House voted 221 to 205 last night to uphold. And with the most contentious spending bills still pending, pressure is mounting on GOP leaders to abandon spending caps on which the projected surpluses were based.
Still, when it comes to farm aid, fiscal conservatives in Congress are hard to find.
"The politicians love to talk about the market when prices are good, but everyone knows that prices change," said John M. Schnittker, another agricultural economist. "Then it's a race to pass the biggest package they can get."