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46140

Payment cap amendment coming

Senator Chuck Grassley (R-IA) announced Tuesday that he and Senator Byron Dorgan (D-ND) plan to introduce an amendment to the Senate Budget resolution that will cap farm program payments at $250,000 per person per year.

The savings in commodity program payments would be about $497 million over five years, Grassley said.

Grassley has long been a critic of the current system, which he says allows nearly all payments to go to the largest 10% of farms. The savings from capping payments would be split three ways to cover increased spending for conservation, food stamps and renewable energy/rural development.

The savings would help Democrats meet their goals of ramping up USDA support for cellulosic ethanol crop production and biorefineries, but Grassley said he's skeptical that Congress will be able to find the extra $15 billion that the Senate Budget Committee would like to add into the budget for the next farm bill.

"They aren't saying where the offsets are coming from, so in reality there may not be {an extra] $15 billion in the farm bill," Grassley said. He added that he supports that goal of increasing ag spending by $15 billion.

"I think there is the hope among Democrats, and I'm not sure we as Republicans share that hope, that there will be money coming from additional revenues," Grassley told reporters Tuesday. The Finance Committee that Grassley chaired until this year and which is now headed by Montana Democrat Max Baucus, is charged with finding those new sources of revenue.

Democrats have talked about improving tax collection and closing offshore tax havens for corporations. Grassley points out that the Democratic party's goal of continuing to protect the middle class from Alternative Minimum Tax and other goals may well use up extra revenue coming from those changes in tax collection.

Grassley said that he believes the Democrats who now control Congress will find it difficult to do all that they want to and still meet so-called pay-go rules already adopted by the House of Representatives. Those rules require the cost of any new programs to be offset with spending cuts elsewhere or with new tax revenue.

The payment cap proposed by Grassley is opposed by many commodity groups but has the support of groups like the Sustainable Agriculture Coalition.

"Passage of this amendment will send a strong message that Congress is finally prepared to level the playing field for family farmers by limiting the ability of the largest producers to bid land away from smaller and beginning operators," said Ferd Hoefner, policy director for the Coalition.

Senator Chuck Grassley (R-IA) announced Tuesday that he and Senator Byron Dorgan (D-ND) plan to introduce an amendment to the Senate Budget resolution that will cap farm program payments at $250,000 per person per year.

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