Bush Says Farm Bill Rewards Millionaires

[Mike]

Bush Says `Bloated' Farm Bill Rewards Millionaires (Update3)

By Alan Bjerga

April 29 (Bloomberg) -- President George W. Bush called the farm bill being put together by congressional negotiators a ``massive, bloated'' piece of legislation that would pay subsidies to ``multimillionaire farmers.''

``It's not the time to ask American families who are already paying more in the checkout line to pay more in subsidies for wealthy farmers,'' Bush said today at a White House news conference in which he called on Congress to take action to help Americans cope with rising food and energy prices.

Congressional negotiators last week reached tentative agreement on a new farm bill that would replace legislation passed in 2002. The bill, which would cost more than $280 billion over five years, is being forged from separate proposals passed last year by the House and Senate.

Bush had threatened to veto both of those bills for failing to adequately change the structure of U.S. subsidy payments, which the World Trade Organization says distort commerce.

The bills also failed to limit payments to wealthy farmers as much as the Bush administration has demanded. Agriculture Secretary Ed Schafer last month said the White House would accept a cutoff of aid to individuals who make more than $500,000 year in taxable income, a lower amount than proposed in the measures approved by the House and Senate.

Remaining Issues

Payment limits are one of the remaining disagreements among congressional farm-bill negotiators, along with aid to fruit and vegetable growers and direct payments to farmers made regardless of crop prices, said Mary Kay Thatcher, top lobbyist for the American Farm Bureau Federation, the largest U.S. farmer group. Bush's comments, and the previous veto threats, are the White House's way of influencing talks, she said.

``Whether they veto the bill or not, they have to keep threatening it at this point,'' said Thatcher, who said she sees a 30 percent chance of a veto.

Bush also defended the administration's response to growing food inflation, which threatens to cause unrest in 33 countries, according to the World Bank. U.S. policies that promote ethanol, which critics say contribute to rising food costs, are a small component of a problem caused largely by high energy prices and export demand, Bush said.

`Deeply Concerned'

``We are deeply concerned about food prices here at home, and we're deeply concerned about people who don't have food abroad,'' he said.

After Bush's remarks, congressional farm-bill negotiators canceled a working session to meet with Agriculture Secretary Ed Schafer to discuss White House demands.

Lawmakers ``are pleased that USDA demonstrated a willingness to come to the Hill and negotiate with farm-bill leaders,'' said Kate Cyrul, spokeswoman for Senate Agriculture Chairman Tom Harkin, Democrat of Iowa.

After meeting with the negotiators, Schafer said the administration still has concerns about the bill being crafted and he would be surprised if Bush signs it.

The current farm bill is set to expire May 2 after being extended four times. Bush has said he would rather see a one- year extension of the law rather than further short-term extensions.

To contact the reporter on this story: Alan Bjerga in Washington at [email protected].

Last Updated: April 29, 2008 16:50 EDT

 

[PORKER]

Bush had threatened to veto both of those bills for failing to adequately change the structure of U.S. subsidy payments, which Bush had threatened to veto both of those bills for failing to adequately change the structure of U.S. subsidy payments, which the World Trade Organization says distort commerce.

Bush will veto both of those bills for failing to adequately change the structure of U.S. subsidy payments, which the World Trade Organization says distort commerce. .

 

[PORKER]

USDA Secy: Doubtful On Completion Of New Farm Bill This Yr.

WASHINGTON (Dow Jones)--U.S. Department of Agriculture Secretary Ed Schafer said Tuesday he is doubtful that U.S. lawmakers will be able to work together any time soon and finish a new farm bill that U.S. President George W. Bush would be willing to sign.

In this case he VETO's it.

 

[the chief]

For once, George W. Bush is absolutely correct.

 

[PORKER]

"The president wants to sign a farm bill that meets his criteria," Conner

said. "If sent to him without meeting his criteria, he would be forced to

veto the bill. "We encourage the conferees to produce a bill which will

gain his signature by reducing the cost and implementing real reform."

Now McCain tells Iowans he would veto farm bill over subsidies
By LIBBY QUAID

DES MOINES, Iowa (AP) — Some things never change: Republican John McCain dislikes farm subsidies. "I have to give you a little straight talk about the farm bill that is wending its way through Congress," McCain said Thursday at the Polk County Convention Center.

"I do not support it. I would veto it," he said. "I would do that because I believe that the subsidies are unnecessary."

 

[PORKER]

White House is being forced to veto Farm Bill.

White House warns farm law needs "real reforms"
By Charles Abbott

WASHINGTON (Reuters) - Congress should cut the cost of its $610 billion farm bill and adopt "real reform" to avoid a veto, a senior Bush administration official said as House and Senate negotiators near a final decision on crop subsidy limits.

The group of six dozen lawmakers planned to meet early next week for final discussions before sending the bill, seven months overdue, to a floor vote.

It would boost nutrition spending by $10.3 billion over 10 years. Ethanol tax credits would be cut by 12 percent, to 45 cents a gallon, and a new credit of $1.01 a gallon would encourage development of cellulose as an ethanol feedstock.

With increasing force, the administration has called for farm program reform in the bill. President George W. Bush said on Tuesday it is incongruous to subsidize multimillionaire farmers when Americans feel the pinch of rising food prices.

"We encourage the conferees to produce a bill which will gain his (Bush's) signature by reducing the cost and implementing real reform," said Deputy Agriculture Secretary Chuck Conner in a statement late on Thursday. "If sent to him without meeting his criteria, he would be forced to veto the bill."

Senior negotiators decided earlier this week to allow big farmers to collect up to $50,000 a year in "direct" payments, a $10,000 increase. Because market prices are high, direct payments are the only subsidies most grain, cotton and soybean farmers receive nowadays.

"That is absolutely, totally off limits," said House Agriculture Committee chairman Collin Peterson, Minnesota Democrat, on Friday when asked if the cap would be reduced.

Still in flux, said Peterson, were the terms of a cap on "direct" payments, which total $5.2 billion a year and are guaranteed to grain, cotton and soybean growers.

 

[PORKER]

A two-week extension of agricultural programs -- a stopgap while waiting for the farm bill -- expires on May 16. Bush could use the occasion for another suggestion to Congress to extend the 2002 law for a year.

There has been far less pressure than usual from farm country for a new law because market prices are so high that most subsidies will not be triggered. Growers will begin the winter wheat harvest in a few weeks, creating some anxiety over what will be the federal safety net.

Farmers might welcome an extension of the 2002 law, said Lesher. Unlike the farm bill, it would mean no cut in crop insurance funding, no cut in "direct" payments which total $5.2 billion a year, and no change in rules that allow up to $360,000 a year per farmer in crop subsidies.

As it now stands, the farm bill would cut direct payments by $313 million, reduce crop insurance funds by $5.75 billion over 10 years and create new rules for access to crop and land stewardship payments.

The bill would deny direct payments and stewardship payments to operators with more than $500,000 AGI from off-farm sources. When they top $950,000 AGI, they would lose 10 percent of the direct payment for each $100,000 in additional income.

 

[PORKER]

WSJ editorial

The Farm Bill and Free Trade
By BERNARD K. GORDON and SUNGJOON CHO
May 7, 2008; Page A19

Presidents don't usually veto farm bills. But now President Bush seems intent on making good on his threat to reject the nearly $300 billion farm monstrosity advancing through Congress.

Back in November, the White House threatened to veto the legislation because – in addition to the usual pork barrel projects – it contained trade-distorting subsidies. These would sow havoc in our international agreements, and perhaps lead to markets being closed to American products.

Congress hasn't stripped out the offending subsidies, even as a House and Senate conference are now putting the final touches on the bill. That leaves Mr. Bush with two options: Reveal that he issued an empty threat, or make use of his veto pen.

This farm bill would be, as some have noted, the costliest in history. Mr. Bush called it "massive and bloated." The price tag on the previous farm bill in 2002 was under $200 billion. Today it is almost 50% higher. This comes at a time when, as a recent Office of Management and Budget report notes, the farm economy "has never been stronger" and there's no need to increase supports and subsidies "to people who are among the wealthiest 2% of Americans," as Congress's subsidies would do.

Fiscal prudence alone dictates that the farm bill be stripped down to its bare essentials. But its trade-distorting subsidies also have the potential to be disruptive and destructive to our economy.

International trade is essential for the American farmer. The U.S. exports tens of billions of dollars worth of farm products every year. To keep markets open and find new places for Americans to sell their goods, the U.S. works with the World Trade Organization (WTO) to hold ongoing talks in Geneva. The so-called Doha round currently underway deals especially with trade to developing countries. It has been stuck at an impasse over subsidies that developed countries give to farmers.

That impasse could soon be broken – if Congress doesn't step in with fresh subsidies for American farmers. Crawford Falconer, the chairman of the Doha Round's farm talks, is circulating a proposal for cutting tariffs and subsidies. The proposal reflects some seven years of negotiations, and is the framework which WTO negotiators are using to hammer out a deal. The president's veto threat of the farm bill was an answer to complaints that U.S. farm subsidies are the main obstacle to completing the Doha Round.

In February, Deputy Agriculture Secretary Charles F. Conner put the issue succinctly: "We need to be in compliance" with WTO rules, otherwise "our $91 billion in farm exports will suffer." He also noted that should the U.S. not comply with WTO rules, the country would be vulnerable and probably lose high-profile agricultural disputes. The U.S. lost just such a dispute in 2005, when the WTO found that U.S. cotton subsidies violated its international trade agreements.

There's another benefit to vetoing the farm bill: Reaching a Doha deal will help forestall efforts to turn, instead, to regional or single-country trade deals. These pacts blossomed in recent years – there are now more than 380 of them world-wide – and are billed as "free trade agreements." In fact they are preferential trade agreements.

Economists call them "trade diverting," and they tend to slice and dice the global trading system in ways that hamper the flow of global commerce. They also tend to hurt small countries and small companies, neither of which can compete as well in a complex network of single-country trade agreements as they can within a global trading system.

Ironically, the 150-plus member Doha deal is likely to get quicker approval in Congress than smaller and more controversial trade pacts, such as the FTAs with Colombia and South Korea which are now stalled.

That was the near consensus of six former U.S. trade representatives who spoke at a recent meeting in Washington. One of them was Charlene Barshefsky, President Bill Clinton's last trade representative.

She noted that it was 1930s-style, Smoot-Hawley protectionism that helped bring on World War II, and that global trade deals could help avoid future conflicts. Ms. Barshefsky was echoing Cordell Hull, FDR's secretary of state, whose views eventually led to the General Agreement on Tariffs and Trade, which later became the WTO.

The six former American trade chiefs also stressed that it is the world's poor who have gained the most from the past 60 years of trade openings.

The presidential veto of a farm bill is heady stuff. Paul Wolfowitz, when he was at the State Department in the 1980s, found out how powerful farm interests can be when he wanted the U.S.'s sugar quota raised for a country he was negotiating with. In a recent speech, Mr. Wolfowitz said he drew a complaint from a New Jersey congressman. When Mr. Wolfowitz expressed surprise that sugar was produced in New Jersey, the congressman shot back: "No . . . but there's one heck of a big sugar warehouse in my district."

Let's hope Mr. Bush is ready to show some leadership on the world trade front.

Mr. Gordon, professor emeritus at the University of New Hampshire, is the author of "America's Trade Follies" (Routledge, 2001). Mr. Cho is an assistant professor at Chicago-Kent College of Law and author of "Free Markets and Social Regulation" (Kluwer Law International, 2003).

notes from others;Senator Kent Conrad says the White House is making up its own rules. He says a veto override would be "a tough mountain to climb."

 

[PORKER]

White House says farm bill agreement unlikely
By MARY CLARE JALONICK – 4 hours ago

WASHINGTON (AP) — The White House said Wednesday it seems unlikely that Congress will pass a farm bill the president can sign.

A bipartisan group of farm-state negotiators on the five-year, nearly $300 billion bill have been working for several weeks to craft legislation that appeases the White House. But they are still far apart on some issues, including the amount of government subsidies that would be directed to wealthy farmers.

President Bush has called the bill "bloated" as crop prices are at record highs and has threatened to veto it. White House spokeswoman Dana Perino said he remains concerned that negotiators have not come close enough to his positions on the bill.

"But members of Congress have continued to work on it, and if they can get there, the president would sign it," Perino said. "But it seems unlikely, and therefore the president would call on them to pass a one-year extension if they can't get to a point where they would pass a bill that he could sign."

Bush met with Agriculture Secretary Ed Schafer on Wednesday to discuss federal support for domestic food assistance. Perino predicted the two would also discuss the farm bill.

The White House told Sen. Saxby Chambliss, R-Ga., on Tuesday that the cost of the bill is still too high, saying negotiators are using budget gimmicks to hide the real expense. The cost of the legislation and the amount of subsidies directed toward wealthy farmers remain the major sticking points between the White House and both Democratic and GOP negotiators.
Negotiators are weighing reports from congressional budget experts on what the bill would cost under several scenarios. They are considering eliminating some government payments to those who make more than $750,000 in farm income annually, which would be closer to the White House's proposal on limiting the subsidies.

The Bush administration originally proposed a cap for those who make more than $200,000 in average annual farm income, but has signaled that it could accept a limit of $500,000.

Negotiators plan to meet again Wednesday. Current law expires May 16, and several negotiators have said they will work to override the bill if the White House vetoes it.

"We are trying to write the best bill we can to generate those votes," said Chambliss.

Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, said the Bush administration "seems intent on destroying the harvest just as the seeds are being planted."

"The White House continues to issue presidential veto threats as farmers plant crops and Congress puts the final touches on a farm bill with strong new initiatives for our nation in agriculture, food, conservation, energy and rural development," he said.

Other Comments;While lawmakers met privately in attempts to appease Bush, his administration worked to rally conservatives who oppose the bill.

Grover Norquist, president of the anti-tax group Americans for Tax Reform, said an administration official criticized the bill at a breakfast attended by conservatives Wednesday morning. Another person who attended the meeting said the official was Deputy Agriculture Secretary Charles Conner, who said Bush was likely to veto the bill.

Norquist said a veto of the farm bill would be popular among the conservative ranks and could help the president solidify his party's position this November. Conservatives believe "this is a fight worth having," said Norquist.

White House spokeswoman Dana Perino said Bush remains concerned that negotiators have not come close enough to his positions on the bill.