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House passes farm bill

WASHINGTON - The House of Representatives passed a new five-year farm bill July 27, even though President Bush threatened to veto the measure, and only 19 House Republicans voted for it because they were upset about the use of a tax provision to ...

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WASHINGTON - The House of Representatives passed a new five-year farm bill July 27, even though President Bush threatened to veto the measure, and only 19 House Republicans voted for it because they were upset about the use of a tax provision to pay for most of a $4 billion increase in spending to expand eligibility for the food stamp program and to raise benefit levels.

The bill would extend the commodity programs in the 2002 farm bill with increases in target prices and loan rates for a number of crops, including wheat and soybeans. It also provides more money for conservation programs and imposes stricter limits on how much individual farmers can get in farm subsidies. Farmers who make more than $1 million per year in adjusted gross income could not get subsidies, while those who make more than $500,000 would have to get 67 percent of their income from farming. Wives would be allowed to be partners in farming operations and would be eligible for their own subsidies.

The bill also contains a compromise on the issue of country-of-origin labeling of red meat that should result in labeling beginning Sept. 30, 2008. The National Farmers Union, ranchers and meatpackers agreed to the compromise.

The vote was 231 in favor of the measure and 191 against, with 19 Republicans voting with the Democrats and 14 Democrats voting against it.

Victory for Democrats

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Passage of the bill was a major victory for House Agriculture Committee Chairman Collin Peterson, D-Minn., and for House Speaker Nancy Pelosi, D-Calif., who worked hard behind the scenes to achieve the compromises necessary to pass the massive national bill.

Both Democrats and Republicans supported the bill until the Democrats announced that they would use a tax provision to pay for the food stamp increase. Democrats called the proposed tax on foreign corporations closing a loophole, while Republicans called it a tax increase.

"If (the Republicans) want to hang their hats on this, the whole middle of the country might be blue before this is over," Peterson said before the vote.

But Peterson also said the Republican threat had forced him, Pelosi and other House leaders to work late into the night to make changes in the bill to make sure urban liberals would vote for it.

"The speaker knocked some heads together last night," Peterson said July 26 as the bill was finalized. "It came close to being unraveled."

McGovern-Dole programPeterson said that at 2 a.m., by telephone, Pelosi had approved a change in the McGovern-Dole international school feeding program, shifting its funding source from appropriated funds to mandatory spending and providing $840 million over five years for that program. Peterson said that provision won the support of Rep. Jim McGovern, D-Mass., who is not related to former Sen. George McGovern, S-D., for whom the program is named, but who takes a leadership role on domestic and international hunger issues. To pay for the McGovern-Dole program and deal with other funding issues, Peterson said he had made another

$1 billion in cuts in the crop insurance program, bringing the total cuts in that program to $3 billion in addition to $2 billion in savings from shifting the timing of crop insurance payments. Peterson said that if crop insurance executives and agents are upset about the cuts, they can blame Republicans "for costing them close to $1 billion over 10 years" because of the Republican unwillingness to support the bill because that gave McGovern "the leverage" to force the change.

Peterson also said that in the latest version of the bill, the crop insurance program would be funded in the second five years of the 10-year score through an offset from the energy bill that cut oil company royalties and tax breaks for other purposes. Peterson said he had achieved that savings by ending the renewable energy programs after five years rather than continuing them indefinitely.

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Tax provisionThe tax provision would collect taxes on tax royalties, interest and other payments U.S. foreign-owned companies make to foreign affiliates. Pelosi said July 27 on the floor that writing the bill under House pay-go rules that require either cuts in other programs or increasing taxes when Congress spends money in new ways - as the farm bill does - "was a challenge. It has been met in a way that meets our values."'

House Ways and Means Chairman Charles Rangel, D-N.Y., said during the debate that House leaders had explained to him that they had "run out of money" when it came to funding food stamps and that he had helped them.

"The Ways and Means Committee is a tax-writing committee," Rangel noted, adding that since he didn't want to raise either personal or corporate taxes, "I decided to find out who's not paying taxes and bring that revenue in so we could have a bipartisan agreement." As Republican members hollered at him, Rangel told them, "Never come to the tax writing committee and ask for relief."

House Agriculture ranking member Bob Goodlatte, R-Va., who did not vote for the bill, said in debate that the provision "pits America's ranchers and farmers against its working class" because it taxes manufacturers.

Amendments rejectedThe House rejected an amendment Rangel offered to ease regulations regarding U.S. agricultural sales to Cuba and make it easier for farmers and agribusiness executives to get permission from the U.S. government to travel to Cuba. The vote was 245 against to 182 for the amendment.

Rangel said, "If we want to win the hearts and minds in Cuba, it should be abundantly clear our greatest assets are our farmers."

But Rep. Ileana Ros-Lehtinen, R-Fla. said a provision that would let Cuban food inspectors to come to the United States "would give free reign to any intelligent agent to come to the United States."

The committee also rejected the major alternative to the farm bill, an amendment offered by Reps. Ron Kind, D-Wis., and Jeff Flake, R-Ariz. The vote was 309-117. Although most Democrats voted against it, Pelosi and House Majority Leader Hoyer praised Kind. Pelosi said Kind's "persistent and brilliant advocacy" had moved the legislation "to a very important place."

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The House also approved by voice vote an amendment offered by House Financial Affairs Chairman Barney Frank, D-Mass., that removed a provision in the bill that would have allowed Farm Credit system banks to make loans in areas that are forbidden to them by law. But Peterson said he and Frank would hold joint hearings on the availability of credit to farmers and farm-related businesses, particularly ethanol plants.

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