After our initial Senate Farm Bill blog post, we found a great- really great- summary on the state of Senate Farm Bill politics. So we're going to excerpt that instead of writing another one ourselves. Steve Kopperud of Brownfield gets it right, and we encourage you to read the whole thing. More information on the money situation came to light yesterday, and we'll have more on that in our next post.
It's beginning to appear at least the Senate may have even tougher sledding than the House. In the Senate, every dog's a big dog -- committee chair or not -- and some of the biggest dogs from the ag sector of America are getting set to square off over everything from regional priorities to how federal dollars get to be spent.
The current leading man in this three-act drama is Sen. Tom Harkin (D, IA), chair of the Senate Agriculture Committee. Harkin is a veteran of Farm Bill wars, and at this point in time, is likely undaunted by the rural uprising that appears to be brewing around him. However, recent remarks by the junior Senator from Iowa indicate he's more than aware he'll need to start modifying his dream Farm Bill well in advance of September 17, the date he's set to unveil his draft bill and begin committee deliberations.
The fundamental challenge facing Harkin boils down to disaster relief versus commodity program reform. The big pain in his, er, neck right now is Sen. Kent Conrad (D, ND). And the magic Harkin must conjure is how to keep his southern committee members from both sides of the aisle marching in lockstep behind his vision.
Conrad wants a permanent disaster program at USDA for farmers. This is admittedly a good thing, given the droughts, floods, hurricanes and other mischief of nature farmers have withstood over the last few years. The problem is Conrad wants a big -- no, a really big -- permanent disaster program, one that insiders say will cost $4-5 billion. He's also willing to "work with" his southern colleagues to help them maintain the status quo on farm program payments and beat back a tight cap on direct payments in exchange for their support for the really big federal disaster program.
Harkin is willing to look at a hybrid crop insurance program to help farmers with disasters, and he's willing to parrot the House bill by giving USDA the formal authority to create a permanent diaster program. However, he's also publicly committed to at least trying to reform the commodity program title, including capping direct payments to farmers at $250,000 and taking any farmer making more than $500,000 a year in adjusted gross income out of the subsidy pool altogether, according to a draft proposal he circulated this week.
Of course this all boils down to money or the lack thereof. The Senate budgeteers gave Harkin about the same amount of money to spend on a Farm Bill as was spent in 2002, along with a $20-billion cushion that can be used if he whacks other programs to offset new spending. It's going to be darn tough to pay for expanded conservation programs, alternative energy research, broader nutrition and feeding programs, etc., if he's hamstrung with a $5-billion disaster program up front.
Enter emerging co-star Sen. Max Baucus (D, MT), chair of the Senate Finance Committee, who plays the role of the money man in this drama. As when House Ways & Means Committee Chair Charlie Rangel (D, NY) had to conjure up over $4 billion to pay for Speaker Pelosi's desire to expand the food stamp program, all Senators with Farm Bill plans and programs are seeking an audience with Baucus, many on bended knee, in hopes of an offset to pay for their programs.
Baucus is playing it shrewdly, however, and unlike Rangel, he's already said he won't go for tax increases, which means the House scheme to tax the U.S. subsidiaries of foreign-owned companies is pretty much dead. However, he's putting conditions on his largesse. He's known to be putting together an offset package for Farm Bill spending that reports say will "add billions to farm spending." But he'll likely dictate where that money will go and he's a big supporter of the really big permanent disaster program. This does not bode well for Harkin's effort to get an extra $6 billion for conservation, nutrition and specialty crop programs.
So, the hunt is on in the Senate for at least $10 billion, and members of the Senate Finance Committee -- eight of whom also sit on the ag committee -- are being tight-lipped. Conrad says "hundreds of ideas" are on the table.