Farm-state Republicans balk on farm bill

Associated Press

WASHINGTON &#8212 A multibillion-dollar farm bill already facing a White House veto threat ran into new challenges before Thursday’s debate in the full House. Farm-state Republicans threatened to defect from the measure in a spat over taxes.

Just hours after the White House said the bill failed to cut growers’ subsidies enough, Republicans said they would withdraw support if Democrats pressed ahead with plans to include a tax increase.

A proposal to tax certain foreign-owned companies with U.S. subsidiaries would pay for $4 billion in food stamps and other nutrition programs.

Rep. Bob Goodlatte of Virginia, the top Republican on the House Agriculture Committee, said GOP members of the committee felt “betrayed” by that plan. He said they would vote against the farm bill if it included the tax proposal.

GOP officials said their rank and file – including those from rural states that would benefit from the farm bill – were reluctant to support what they viewed as a massive business tax increase.

The overall bill would either leave in place or increase subsidies for major crops. Some Democrats are uneasy about the bill and defections among Republicans could doom it.

Without the additional $4 billion, Democrats would lose substantial support from lawmakers representing urban districts. These areas rely heavily on the nutrition programs.

Agriculture Secretary Mike Johanns, citing the subsidies in the bill, said, “We believe the bill put forth by the committee misses a major opportunity.”

House Speaker Nancy Pelosi, D-Calif., has said the bill is a “critical first step for reform.” Some of her fellow Democrats as well as environmental and nutrition activists say the legislation does not trim government programs enough.

The bill would ban subsidies to farmers whose income averages more than $1 million a year. It also would stop farmers from collecting payments for multiple farm businesses.

The Senate is due to begin its consideration of the legislation in September.

Johanns said the millionaires proposal would affect about 7,000 farmers. He said the administration has suggested limiting subsidies for farmer whose income exceeds $200,000; such a proposal would affect 38,000 farmers, Johanns said.

The House committee chairman, Rep. Collin Peterson, said the administration had “failed rural America and all Americans.” Peterson, D-Minn., said the measure had the support of a range of agriculture, conservation, nutrition and renewable energy advocates.

Johanns also criticized the proposal by Rep. Lloyd Doggett, D-Texas, to pay for nutrition programs by taxing overseas businesses.

Doggett said the plan would not effect “legitimate multinational corporations that are not employing a haven to dodge American taxes.”

But Jim McCrery, R-La., said Democrats were trying “to sneak a far-reaching and potentially destructive proposal through the House without proper consideration.”

A White House statement said the House bill “moves backward” and could compromise international trade negotiations.

The administration also expressed concern that the bill includes provisions about paying prevailing wages on ethanol plant construction projects. The requirement typically gives an advantage to unionized companies bidding for federal contracts.

Johanns did praise a proposed amendment by Reps. Ron Kind, D-Wis., Jeff Flake, R-Ariz., and others to further cut back on subsidies.

They would steer more money toward conservation, aid for specialty crops like fruits and vegetables, and nutrition and rural development programs.

That effort has divided Democrats and caused concern among farm-state lawmakers who argue it would devastate agricultural programs and cost the party its newly won majority.