A presidential veto of a farm bill would be “a tragic policy error and a monumental political error,” says Larry Combest, former chairman of the U.S. House of Representatives Agriculture Committee.
Combest, who now represents ag interests through Combest, Sell and Associates, told members of the U.S. rice industry that a farm bill veto would be “catastrophic.”
The former Texas congressman addressed the annual Rice Outlook Conference in Orlando. He shared the podium with Missouri Congresswoman Ann Emerson, USDA Under Secretary for Farm and Foreign Agriculture Service Floyd Gaibler; and Jim Wiesemeyer, vice president of Informa Economics, in Washington, DC.
Wiesemeyer expects a presidential veto if a bill resembling either the House version passed last summer or the Senate version currently under debate makes it to the president's desk.
Speakers expressed significantly different views in what a good farm bill should include. Emerson and Combest agreed that the House bill is a good one. She supported that bill in spite of her party's opposition to parts of it. She said she was accustomed to bucking party politics that go against the best interests of her district. “I'm elected by my constituents,” she said, “not the party leadership and not the White House. I don't know when I've seen Congress more partisan than it has been the last year.
She expects the bill under consideration in the Senate to be ready for conference by year's end and on the president's desk by the end of January, “if everyone does his job.”
She said protecting interests of the Mid-South is critical.
Gaibler agrees with Wiesemeyer that the bills currently being debated will not pass muster with the White House. He said each lacks real reform and increases market distortion. “The administration wants a bill the president can sign,” Gaibler said. He cited three principles necessary in a good bill, including:
It must be more equitable, more predictable and able to withstand trade challenges.
It must be fiscally responsible.
It must support renewable energy, conservation, research, rural development, and trade.
The administration also wants to see tighter payment limits with an adjusted gross income cap at $200,000 instead of the $1 million cap in the Senate bill. The administration also wants planting flexibility for fruit and vegetables onto program crop acreage.
Another bone of contention is how Congress will pay for increases. He said the House Democrats referred to a proposal closing tax loopholes, but the administration considers the action a tax increase and a tax on other industries.
He said the Senate version includes increased loan rates and higher target prices for several commodities. “They (the Senate) propose stricter payment limits, more money for conservation and a permanent disaster program,” he said.
Without farm law reform Gaibler said U.S. farm commodities would become more vulnerable to WTO challenges.
Combest said the House bill is “a wonderful product. Congressman (Collin) Peterson did a wonderful job in the House. He recognized regional differences and helped pass an extremely good bill.”
Combest and Emerson believe the Senate will get the bill to conference by January. Amendments, nearly 250, proposed for inclusion in the bill, will be whittled down to around 15, they said.
“There are some ugly amendments,” Combest said. The Dorgan-Grassley payment limitations amendment is one. “That includes some pretty ugly policy,' Combest said.
He and Wiesemeyer both said the amendment could be defeated. “There is a concentrated effort to defeat it,” Combest said.
“The South will revolt and that will mean no bill,” Wiesemeyer said.
He said the Senate has “no strategy” to pass the farm bill. They waited way too long. The House passed a bill July 22. The Senate has three weeks left to deal with the farm bill and many other issues. That's no way to run a country.”
He said the 2007 farm bill will be “the last farm bill that bears any resemblance to traditional farm programs.”
Obstacles to passing a farm bill include budget restraints and public perceptions. “In 2002, passing a farm bill was relatively easy with a budget surplus. In 2007, it's hard with a deficit. And the news media keeps up a steady drumbeat against current farm spending.”
“The media just doesn't get it,” Emerson said. “They don't understand what you do to feed the world.”
Combest, Wiesemeyer, Gaibler and Emerson all expect to see a farm bill go to the president before Congress is forced to extend current law, something they also agree would be bad for agriculture.
Extending the current program would jeopardize baseline spending for commodity programs.
“This is our best opportunity for farm program reform,” Gaibler said.
“An extension is the wrong direction to take,” Combest said. “Producers need to know (what's in a farm bill) to make decisions.”
Emerson said she and others voted for an extension “to put pressure on the Senate.”
Combest said the administration was “short of embracing the 2002 farm bill. But President Bush signed it. I want to see him step up and do the right thing and sign the 2007 farm bill.”
Wiesemeyer doesn't expect Bush to be as willing to sign as he was in 2002. He said the White House took a lot of criticism from conservative Republicans over signing the 2002 bill.
When the farm bill gets to committee, Wiesemeyer expects the following to be key issues:
No tax increases, a defined by the White House.
Across the board cuts.
Spending increases for nutrition.
Baseline funding for specialty crops.