Senate farm bill conferees today agreed on an offer to the House on a package that includes a $12.5 billion increase in spending over 10 years. It would include the disaster aid and the tax package that the House left out of its proposal Thursday. But conferees want to use different offsets than the credit-card reporting requirement the House offered. House Agriculture Chairman Collin Peterson made a $5.5 billion offer without the disaster aid and tax packages, but Senate Finance Chairman Max Baucus and Senate Finance ranking member Charles Grassley found the House offer unacceptable. “Chairman Baucus wants the agreement that Chairman Peterson sat in a room and made with him,” a Baucus aide said. He was referring to an earlier meeting at which Senate Majority Leader Reid, House Speaker Pelosi, Senate Agriculture Chairman Tom Harkin, Baucus, Peterson and House Ways and Means Chairman Charles Rangel had agreed to a $10 billion farm bill package and offsets. The aide noted that the National Farmers Union urged the Senate to reject the House offer.
It will accept the basic House offer and “layer on top of it what the Senate wants,” including a $4.05 billion weather-related farm disaster program Baucus and Senate Budget Chairman Kent Conrad have made a top priority, one Senate aide said. The total increase in spending for farm bill programs including nutrition in the Senate bill will be $10 billion. The Senate offer will not include increased government income from a tougher credit-card reporting requirement as an offset. The House proposal to include that generated opposition from credit-card lobbyists and led the senators from Delaware, where many credit card companies are located, to threaten to oppose the bill, one Senate aide said. Instead the Senate offer will include some money from a “noncontroversial” reporting requirement for stock, an extension of customs user fees and a bigger cut in outlays, the aide said. Baucus said the spending would be offset by extending the customs user fee program for $4.1 billion; ending the ability of physicians to do self-referrals to specialty hospitals, which would save $2.4 billion in Medicare outlays; and tightening up basis reporting for stockbrokers, which would raise $6 billion.
The Senate package will also include the $2.5 billion in agricultural tax breaks. A Grassley aide noted the package includes tax breaks for younger farmers and a provision making Conservation Reserve Program rental payments passive rather than active income for Social Security recipients and the disabled. Peterson and House Agriculture ranking member Bob Goodlatte both said Thursday the tax breaks should be dropped. A Senate aide noted that a provision to shorten the depreciation period for race horses has gotten a lot of attention, but that the package includes a number of provisions that House members have supported, including the CRP provision, tax credits for biofuels and faster farm equipment depreciation. Other measures in the tax package would allow deduction of certain broadband Internet expenditures and extend the ethanol tariff from Jan. 1, 2009, to January 2011.
This article appears in the April 12, 2008, edition of National Journal Daily PM Update.