Earlier today we wrote about finding money for the farm bill. Lo and behold, at Congressional Quarterly, there's an update regarding Finance Committee funding sources for the farm bill. Assuming that it is all true (and we have no reason to think otherwise), some thoughts on the various funding details:

Under Baucus’ offset plan, about $7.1 billion would be saved over 10 years by forcing certain categories of visa holders who work in the United States but are currently exempt from Social Security taxes to begin paying those taxes.

That's big dollars, and we're interested to see if Republicans will characterize this as a "tax increase" like they did with some of the House funding mechanisms. But there's a chance that this could get wrapped up in an immigration debate, and that would make for some interesting politics. Senator Chuck Grassley, member of both the Agriculture and Finance Committees, is already saying that while some will view this as a tax increase, he doesn't:

"Anybody that's not paying a tax today that you change the tax law," Grassley said, "if they have to pay one penny more it's a tax increase for that person.

And Grassley said "economic substance" wasn't the only revenue-raising vehicle being considered by the Senate Finance Committee. He also said increased import duties hadn't been ruled out, which to anyone paying such duties might also appear to be a tax. Either way, Grassley said he doesn’t see the committee's approach as a tax increase.

Additionally, in our earlier post we mentioned that Senators from labor-intensive specialty crop regions could be particularly opposed to imposing new taxes on temporary workers, and Tom Karst over at Fresh Talk is ready to go to war if that proves to be the case. We'll have to see the details to get the whole picture.

Back to Congressional Quarterly:

Decreasing the 51-cents-per-gallon ethanol tax credit by 5 cents would save about $854 million over 10 years. That provision would take effect only after annual ethanol production has reached 7.5 billion gallons.

Uhhh... Somebody explain to me how this will fly politically. Not in the majority of states represented on the Ag Committee, that's for sure. If this passes, we anxiously await the first presidential candidate's response when asked if they support this.

We also wonder if leaving the tax credit at 51 cents but only giving it to ethanol produced by locally-owned co-ops and from feedstocks grown according to a decent conservation standard would save a lot more money. But we digress.

About $3.2 billion would be raised over 10 years from a change to the tax treatment of “sale-in, lease-out” deals, which typically provide tax-loss benefits to investors and brokerage firms.

I have no clue what this is, but it looks to me like it could tick off some rich people, and that always creates political problems. If I find out more details, I'll post them here.

His plan also would revise the tax treatment of “1031 exchanges,” real estate transactions that allow a deferral of capital gains taxes on property sales if the profit is reinvested in other property within 180 days. Baucus’ bill would bar land buyers from taking advantage of this tax break if they sell developed land and reinvest the cash in undeveloped land.

Sounds good, but probably doesn't go far enough. Overall, we'll be anxious to see the political reception to these measures, and it may be wise for the Ag Committee to wait until after next week's Senate recess to determine how eagerly they should embrace this money. The politics could get tricky.

An interesting thread here- All of these provisions have at least some relation to agriculture. My guess is that there are members of the Finance Committee who insist that at least some of the new funding comes from ag-related measures. That's going to force members of the Ag Committee to make some tough choices about what their priorities are.

The ethanol tax credit vs. a permanent disaster program? Imposing new taxes that disproportionately affect fruit and veggie growers in return for greater school lunch purchases of their same products? Ouch.  Then again, in Congress there is often a disturbing tendency to simply find more money instead of deciding how to wisely spend the money they already have. Maybe it's about time some tough choices were forced upon them.