NACIA Farm Bill Update - Some Progress, but Veto Threat Reaffirmed
1/29/08

Washington is now back in the swing of things, with both Chambers back in session (for now) and things returning to business as usual. Unfortunately for the Farm Bill, business as usual means that House and Senate negotiators are still faced with the seemingly insurmountable problems of how to pay for the bill and a veto threat by the Administration.

While conferees have not yet been appointed, we have been told that Chairman Peterson continues to meet with Acting USDA Secretary Chuck Connor to try and work out some of the differences. It has been reported that Chairman Harkin was also present at a recent meeting. Chairman Peterson has expressed hope that he and Chairman Harkin can work out the House-Senate differences, but has also suggested that the changes the Administration would like made would prevent the bill from passing the Congress.

Yesterday, the Senate unanimously confirmed former North Dakota Governor Edward Schafer as Secretary of Agriculture, officially fulfilling the role that Acting Secretary Connor has been since former Secretary Johanns resigned last September. It is expected that Under Secretary Connor will continue to play a significant role in Farm Bill negotiations. It is unclear to what extent Secretary Schafer will be involved, but he also is expected to participate. What is very clear, however, is the veto threat from the Administration. In his State of the Union Address last night, the President declared that he will veto any legislation that raises taxes. He also stated that he will veto any bill that raises taxes and tries to disguise it by calling it something else.

For further information on the State of the Union Address, please investigate the following links.
The transcript is posted here: http://www.whitehouse.gov/news/releases/2008/01/20080128-13.html, and policy initiatives mentioned in the Address are explained here: http://www.whitehouse.gov/stateoftheunion/2008/initiatives/index.html.

Chairman Peterson has been quoted as stating that it is his goal to have a bill out of Conference by the President’s Day Recess (third week of February), so as to have time to deal with a potential veto prior to March 15, when the current extension on the Farm Bill expires and Congress leaves for a two week Spring Break. However, Chairman Peterson realizes that this is a lofty goal, and is pushing for a bill before or after the February break.

It is our understanding that the staff of the House and Senate Agriculture Committees continue to meet. Progress is being made in some areas, particularly policy areas and other provisions separate from funding. However, this progress is all for naught if there is no source of funding found for the policy provisions. Further complicating the matter, the Congressional Budget Office has completed the scoring of the Senate bill. The budget score reduces expected savings of some of the bill’s provisions, adding an additional $1.8 billion onto the already enormous sums of money needed to be provided.

If no funding compromise is found, or if the Administration vetoes the bill out of Conference, the possibilities would appear to be either an extension or a reversion to permanent law, the 1949 Act. Chairman Peterson continues to say that an extension would upset too many groups, such as the conservationists, the fruit and vegetable groups, and the nutrition groups. However, reverting back to the 1949 Act would be so prohibitively expensive that it does not seem to be a likely scenario. If there is no compromise bill and/or a veto with no override, in all probability we are looking at a straight-up extension or some version thereof.

We will continue to monitor the situation and let you know further developments as they occur. We would like to remind you that there are provisions in both the House and Senate bills that have the potential to damage the crop insurance program, so we will continue to advocate for our issues as agents and for the strength of the crop insurance program.

Lastly, we would encourage you to start the New Year right and to pay your 2008 NACIA dues, which you can now do online.

As always, if you have any questions or need anything, please do not hesitate to contact us.

Brent W. Gattis
NACIA Washington Representative