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Disaster aid, tax bill threaten farm bill

After months of wrangling over a new farm bill, the deadlock still boils down to disagreement over paying for it. That was the main point of agreement after a two-hour meeting of the farm bill conference committee late Monday afternoon.

So far, the House and Senate Agriculture Committees have agreed to a broad outline of a new farm bill that would spend an extra $10 billion over the budget baseline over the next ten years. The bill's total spending is projected at about $600 billion. But neither side agrees on the ways to come up with the extra money. The Senate bill includes $4 billion in new money for a permanent disaster program, while the House doesn't.

Another big sticking point is $2.5 billion in tax cuts for farmers that neither the Speaker of the House, Representative Nancy Pelosi (D-CA) nor House Minority Leader John Boehner (R-OH) support.

A key member of the conference committee, House Ways and Means Committee Chairman Charles Rangel (D-NY), made that clear several times during the conference committee meeting Monday.

"I am not authorized to come out of the Ways and Means Committee with an agreement that involves the $2.5 billion," Rangel said.

Senator Chuck Grassley, the ranking Republican on the Senate Finance Committee, insisted that his committee's tax cuts are all directly related to agriculture.

For example, the bill would stretch out capital gains taxes for farmers who sell land to beginning farmers on a contract for deed, he said. And it would fix a problem with the treatment of conservation reserve program rents for those on social security, he said.

It would also give farmers a bigger tax credit for windmills, he said. Right now, large companies owning wind generators get a credit of 2 ½ cents per kilowatt hour while farmers get one cent, he said.

"Do you want to treat the farmers less well than we treat corporate giants? I don't think so," Grassley said.

But at the end of the committee session large differences remained. Some of the money for the disaster program would come from shifting customs fees to the farm bill. Rangel may want to use more of that for helping workers displaced by jobs lost to overseas companies.

In order to come up with enough money for the disaster program and for increases in conservation spending, the Senate framework for a farm bill also makes cuts, trimming agricultural research by $1.2 billion over ten years and zeroing out spending on rural development.

At the end of the session the conferees agreed to meet again today, but House Agriculture Committee Chairman Collin Peterson (D-MN) said he isn't optimistic that a farm bill will be finished unless the financing issues are resolved.

After months of wrangling over a new farm bill, the deadlock still boils down to disagreement over paying for it. That was the main point of agreement after a two-hour meeting of the farm bill conference committee late Monday afternoon.

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