July 12 (Bloomberg) -- A five-year farm-policy bill House Republicans passed and sent to the U.S. Senate now faces opposition among the Democrats needed to craft the final law, making the party-line vote a potentially hollow victory.
The House plan was approved yesterday 216-208 without Democratic support. The Republican measure severing food stamps from farm programs that were linked for decades makes the bill "extremely flawed," said Senator Debbie Stabenow, chairwoman of the Senate Agriculture Committee and the likely leader of that chamber’s negotiating team.
The bill "is not a real farm bill and is an insult to rural America," the Michigan Democrat said in a statement. President Barack Obama’s administration has threatened a veto of the plan were Congress to pass the scaled-back version, which was debated three weeks after the House rejected a more expensive measure.
Farm legislation, which benefit crop-buyers such as Archer- Daniels-Midland Co. and insurers including Wells Fargo & Co., has been working through Congress for almost two years. The Senate on June 10 passed S. 954, a plan that would cost $955 billion over a decade. Current law begins to expire Sept. 30.
The House plan’s 10-year cost is $196 billion, according to the Congressional Budget Office, with the lower price reflecting elimination of food stamps, the bulk of U.S. Department of Agriculture spending authorized by the bill.
House action has been stymied largely by disagreements on the program. The legislation rejected last month, H.R. 1947, would cut spending on the Supplemental Nutrition Assistance Program, responsible for more than three-quarters of the bill’s costs, by about 2.5 percent, roughly $2 billion a year. Democrats who balked at the reductions joined Republicans objecting to the plan’s cost to scuttle the bill. Republican leaders revived the measure in scaled-back form.
The stripped-down plan gained support from Republicans willing to deal with food stamps later. "It’s not a secret I am not a fan of the farm bill," said Representative Jeb Hensarling, a Texas Republican who opposed the June version and supported the bill yesterday. "I’ve learned around here that you rarely get to vote for success but you can vote for progress."
The revised version also removed language that effectively would replace current law with policies set in 1938 and 1949 when the law expired. The threat of reviving those old laws has helped prod Congress to modernize farm-subsidy and farm-loan programs, since the laws set terms that could double the wholesale price of milk starting next year. The House plan would do away with that leverage, said Representative Michael Conaway, a Texas Republican.
Beyond that, the bill is basically the same as the previous farm-policy measure. It would end direct payments to U.S. farmers and expand a crop insurance-based safety net.