Farm bill would allow continued subsidies for millionaires

The House and Senate farm bills would allow millionaire landowners to continue to cash big government subsidy checks despite language in the proposals intended to cut off crop subsidies for the wealthy, according to a new analysis of tax data by GOP Senate aides.

Finance Committee ranking member Charles Grassley (R-Iowa) yesterday released the analysis, which is based on data from the Internal Revenue Service and Congressional Budget Office. It estimates that under the proposed new farm bills, hundreds of millions of dollars in crop subsidies would continue to go out to landowners whose overall adjusted gross income for the year exceeds $1 million.

“The House and Senate farm bills left loopholes that a 9630 John Deere tractor could drive through. It was reform in name only. Now I hope we can move to legislation that includes real reform,” Grassley said.

Grassley is a member of the conference committee charged with hammering out an agreement on the House and Senate farm bills. The Senate’s version of the farm bill, approved in December, would stop payments to non-farmers who make more than $750,000 a year but has no income caps for farmers. The House bill would cut off farm payments for millionaire farmers or non-farmers who make more than $500,000.

The Bush administration is pushing for a much lower cap of $200,000 in adjusted gross income. White House officials have threatened to veto the bill if it does not include more reform.

Other members of the conference committee said yesterday that income limits will be a major topic of negotiation for the farm bill, but the panel is unlikely to go as far as Grassley or the administration has suggested.

“The White House is insisting on it so the prospects of additional reform are probably pretty good in the conference,” said Sen. Kent Conrad (D-N.D.). “But it is not going to be what the administration is calling for.”

Conrad said the $200,000 income cap is “not in synch” with the high costs of farming, as fertilizer and other prices have almost doubled.

Agriculture Chairman Tom Harkin (D-Iowa) said the income limits are the “big sticking point right now” that members “have to work out.”

Harkin said the proposal from Grassley and Sen. Byron Dorgan (D-N.D.) — which would have placed a hard cap on how much any farmer can receive in federal subsidies rather than basing the limits on income — has already had its chance in the Senate and is unlikely to be included in the conference. The Grassley-Dorgan amendment failed in a 56-43 vote during the farm bill debate. It needed 60 votes for passage.

In 2006, the Agriculture Department paid more than $230 million to landlords and farm operators who exceeded the House income cap and $137 million to those exceeding the Senate cut-off. The Congressional Budget Office has estimated that 83 percent of those funds would continue to go out under the House bill, and 95 percent would continue to be paid under the Senate bill.

Grassley said the continued payouts would be possible because landowners could switch the way they collect rent from the people farming their land, so their tenants could continue to receive the commodity payments. High-income farmers could also buy more land to bring their adjusted gross income level down or divide the payments among other family members.

Grassley based the analysis on data he requested from IRS on how many recipients of farm payments have an income above the cap and whether or not they were landlords.

A coalition of environmental, religious, sustainable farming and taxpayer groups have advocated for lowering the income level or including the payment cap in the new farm bill. They say the current payments unfairly favor large industrialized agriculture. The Sustainable Agriculture Coalition suggested applying the lower income cap to the land, rather than the landlord or producer.

“No one on the farm bill conference committee should suffer under any illusions that taking action on an AGI limit is, by itself, doing anything very significant for payment reform,” Sustainable Agriculture Coalition director Ferd Hoefner said yesterday of the analysis.

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Is Congress Finally Ready to Go Green?

As concern over global warming became more and more prominent in the U.S. over the past several years — in the media, in opinion polls, in business and in state governments — the one place where the issue seemed all but invisible was the one place that could really do something about it: Congress. But that began to change in 2007, and nowhere more so than in the Senate's key committee on the environment and public works, which drafts much of the country's environmental legislation. Up until last January, the committee was chaired by Alaskan Sen. James Inhofe, a Republican who memorably called global warming "the greatest hoax ever perpetrated on the American people." When the Democrats took over Congress in the 2006 midterm elections, however, the chairperson's gavel was handed over to Sen. Barbara Boxer of California, and the floodgates opened. Boxer began a series of open hearings on the science of global warming, giving airtime to the sort of experts — including former Vice President Al Gore — who had been suppressed under Inhofe. "As soon as the change took place, I realized that this was going to be one of my number one goals," says Boxer. "Elections have consequences, and this was one of the consequences."

Hours and hours of hearings finally led to a legislative breakthrough in December: the passage out of the committee of the first bill that would put carbon caps on the U.S. economy. Co-sponsored by the Republican Sen. John Warner and the Independent Sen. Joseph Lieberman, the America's Climate Security Act would cap U.S. carbon emissions at 15% below 2005 levels by 2020, with a 70% cut projected for 2050. If enacted, those carbon caps would all but force U.S. businesses to invest in cleaner technology and greater energy efficiency, and would help the country take a leadership role in international climate negotiations.

Similar bills had been put forward over the past several years, only to die in committee. This time, however, Boxer was able to help pull together not only Democrats but also several Republicans on the committee, ensuring relatively bipartisan support. That's key — given how narrowly divided Congress has become, meaningful climate change legislation only has a chance if its supporters can draw allies from across the political aisle. Boxer is confident she can. "The environment has been an issue that has pulled together Republicans and Democrats in the past," she says. "Everyone has to breathe the same air."

The Climate Security Act has passed the first barrier to becoming law, but the road is only going to get tougher. To have a chance in the Senate, the bill needs at least 60 votes — anything less, and opponents can stop it with a filibuster. That will require winning over more conservative Senators, while at the same time ensuring the bill doesn't become so watered down that it loses all effectiveness. And even if the bill were to pass the Senate, and then the House of Representatives, it still has to make it through President George W. Bush, who has shown little inclination to support it. Bush favors what he calls technological solutions to global warming, but without the pressure of carbon caps. "That's like saying let's meet at the field and play baseball, but you don't bring a mitt or a ball," says Boxer. "You can't play the game."

Critics like Bush tend to focus on the economic costs of reducing carbon emissions — through increased energy prices — but Boxer, and many of her supporters, believe that combating climate change can have a net positive effect on the economy. Boxer hails from California, which has already passed the strongest state legislation on climate change, cutting carbon emissions to 1990 levels by 2020. Far from hurting the state economically, Boxer notes, the carbon bill has helped California become the center for green innovation in the U.S., with Silicon Valley venture capitalists pouring billions into alternative energy start-ups. Those businesses will create new, green jobs that should make up for the short-term costs of cutting carbon. "The cure for global warming is positive," says Boxer. "That makes it easy for me to approach it with hope."

Emphasizing the hope, the positive possibilities of dealing with climate change, should also help Boxer broaden the appeal of the Climate Security Act. Americans are worried about global warming, but they're also worried about Iraq, the economy and health care. Make global warming into an economic issue, or an issue of national security, not just an environmental one, and there's a better chance of achieving broad, bipartisan support. Not all environmentalists are happy with the Climate Security Act — it has been criticized by the Sierra Club, among other groups, as too weak. While it could be tightened, the reality is that only a moderate bill is likely to pass soon, and with science telling us that we may have less than 15 years to turn around carbon emissions, we can't afford to hold out for a perfect law. "The longer we wait to do what we need to do, the harder the transition will be," says Boxer. "We're running out of time." She's absolutely right, but at least Congress is no longer standing still.

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