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.
Farm-policy legislation without food stamps has been opposed by groups, including the American Farm Bureau Federation, the largest U.S. farmer organization. Last week, more than 530 groups signed a letter of opposition to the plan. Other organizations, including the Texas Farm Bureau, the National Cotton Council of America and the National Pork Producers Council, supported it.
Senator Michael Bennet, a Colorado Democrat, said the plan fell short both for farmers and food-stamp recipients, while Senator Heidi Heitkamp, a Democrat from North Dakota, said omitting food stamps to build House Republican support harms its chances of passing Congress.
"Authorizing nutrition policies in the farm bill is necessary to maintaining the critical urban-rural coalition that has been relied upon to pass farm bills for the past four decades," Heitkamp said in a statement. "Breaking this coalition and severing ties between farm and table is a mistake that weakens the chances" of any plan becoming law, she said.
Despite her misgivings, Stabenow said she was willing to work with House lawmakers on their plan as part of a final law. While sidestepping food stamps for the moment, some small- government advocacy groups that have called for changing the program said they don’t like the possibility that a later House- Senate conference committee could go its own way.
"We highly suspect that this whole process is a ‘rope-a- dope’ exercise" of "splitting up the farm bill only as a means to get to conference with the Senate where a bicameral back-room deal will reassemble the commodity and food stamp titles, leaving us back where we started," one of those groups, the Club for Growth, said in a statement.
Still, simple approval of a plan that has struggled to get anywhere in the House was seen as a victory by some lawmakers. "Thank God we can do something," said Tom Rooney, a Florida Republican, said as he walked off the House floor.
The House legislation is H.R. 2642.
--With assistance from James Rowley and Roxana Tiron in Washington. Editors: Steve Geimann, Michael Shepard
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