October 22, 2011 in Nation/World

Millionaire growers lose subsidies in Senate plan

Mary Clare Jalonick Associated Press
 

WASHINGTON – Unable to agree on whether millionaires should be taxed more, Democrats and Republicans are in rare accord on one issue: Growers with million-dollar incomes shouldn’t reap farm subsidies.

In an emphatic vote early Friday, 84 senators voted to discontinue certain farm subsidies for people who make more than $1 million in adjusted gross income. The practical impact of the vote may be marginal – current limits are about $1.2 million at most – but it represents a sea change in how the heavily rural Senate views farm support. In recent years, many votes to limit subsidies have failed in the Senate.

“I do think sentiment has changed,” said former Sen. Byron Dorgan of North Dakota, a Democrat who pushed for years to lower subsidy limits. “When they are under this much pressure to cut spending they have to take an honest look at what’s happening, and you can’t justify direct payments under these circumstances.”

Direct payments, the type of subsidy targeted in Friday’s vote, have long been criticized because they are paid regardless of crop prices and yields, unlike other more insurance-like programs that kick in when prices drop or crops are damaged.

As lawmakers prepare for a new five-year farm bill in 2012, leaders of the House and Senate Agriculture committees are looking at getting rid of direct payments altogether, shifting some of the aid to insurance programs that cover falling prices and revenue drops.

Republicans and Democrats on the Agriculture panels have already jointly proposed cutting $23 billion from farm programs over 10 years – almost half of the $50 billion that direct payments cost over that period. They sent the idea to the budget-cutting supercommittee, hoping to head off even greater cuts in next year’s farm bill. Some lawmakers have suggested writing the entire farm bill as part of the supercommittee process.

The ag leaders have promised more details by the end of October on how they will achieve that number, but eliminating direct payments completely is a leading scenario.

The amendment voted on Friday, offered by Republican Sen. Tom Coburn of Oklahoma to a spending bill that includes Agriculture Department programs, would further reduce income-qualification limits set in the last farm bill more than three years ago. Under the most recent limits, some individuals making more than $1.2 million in adjusted gross income can still qualify for the direct subsidies.

Coburn said continued support for the subsidies from some Democrats who want to raise taxes on the rich represents the “height of hypocrisy.”

“Before raising taxes on the rich Congress should first stop spending money on the rich,” he said. “Sending direct payments to farmers who make more than $1 million a year is a de facto tax increase on every middle- and low-income family who doesn’t receive this special benefit from Washington.”

Just how many farmers with $1 million-plus incomes get the subsidies is unclear. Coburn said 2,705 people with incomes exceeding $2.5 million were getting them at one time. That was back in 2006, before the last farm bill imposed stricter income limits on those who can qualify for the payments.

Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., and the top Republican on the committee, Sen. Pat Roberts of Kansas, pleaded with senators to reject Coburn’s amendment while they work out the details of their proposal to the supercommittee.

But only 15 senators obliged – most of them either on the Agriculture Committee or from the South or Midwest where cotton, rice and wheat farmers rely on the direct payments.

Among those who voted against the $1 million income qualification cap in addition to Stabenow and Roberts was Sen. Max Baucus, D-Mont.

© Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Get stories like this in a free daily email


Please keep it civil. Don't post comments that are obscene, defamatory, threatening, off-topic, an infringement of copyright or an invasion of privacy. Read our forum standards and community guidelines.

You must be logged in to post comments. Please log in here or click the comment box below for options.

comments powered by Disqus