WASHINGTON - Senate Finance Committee Chairman Max Baucus, D-Mont., will not allow the Senate to use the same controversial tax provision that the House used to pay for the farm bill, but he still is searching for ways that the Finance Committee can contribute financially to the farm bill, an aide said.
The House farm bill passed July 27 includes a provision to pay for an increase in the food stamp program by taxing tax royalties, interest and other payments U.S. foreign-owned companies make to foreign affiliates. The provision would raise about $7.2 billion in revenue over 10 years. House Democrats claimed the provision would close a loophole, but corporate lobbyists, Republican House members and Bush administration officials said it would be a tax increase on companies that create jobs in the United States.
"We're not going to do anything that is similar to what the House did," Baucus told Congress Daily, a Washington insider publication, Aug. 1.
But Aug. 2, a Baucus aide said the senator, who sits on the Agriculture Committee as well as chairing finance, still is searching for other offsets.
"We've been working with the Agriculture Committee to see if the Finance Committee can help carry some of the load through tax policies that make sense for America's farmers," the aide said. "These might include tax incentives for conservation, energy, equipment and the like."
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Disaster assistance
The aide also hinted that Baucus' price for cooperation would be the inclusion of a permanent disaster aid program, which Senate Agriculture Chairman Tom Harkin has resisted.
"Importantly to Sen. Baucus, we are also considering ideas to deal with disaster assistance," the aide said.
House Agriculture Committee Chairman Collin Peterson, D-Minn., said that if the Senate does not include the provision, "we will have to talk about that in conference." Peterson added that the House bill is paid off under pay-go requirements and that he would say to the Senate what he said to Republican House members who objected to it: "Give us an alternative."
On Senate concern about tax treaties, Peterson said he still objects to the Office of the U.S. Trade Representative and the State Department negotiating treaties under which foreign companies pay lower taxes than American companies.
Meanwhile, Senate Committee Budget Chairman Kent Conrad, D-N.D., said through a spokesman that he agrees with Baucus that the Senate would not approve of the House tax provision, but that he has identified $7 billion within the current farm bill baseline that can be used for offsets in a new farm bill and is looking at items under Senate Finance Committee jurisdiction for additional offsets. A Conrad aide also emphasized that Conrad has found $7 billion in farm bill savings, not $5 billion, as Harkin said early last week.
"We are going to reach the other shore regardless," the Conrad spokesman said.
Conrad sits on the Agriculture and Finance Committees as well as chairing the Budget Committee.
