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Bush Signs $190B Farm Bill

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AP
President Bush has signed a farm bill that expands subsidies to growers and appeals to rural voters, but was opposed by many fellow Republicans as a budget-busting step backward in agriculture policy.

The 10-year, $190 billion bill rains federal money on farm-oriented states that will be campaign battlegrounds this fall, potentially helping Mr. Bush in his quest to win back control of the Senate for the Republican Party — and giving him a chance to rack up support for his own 2004 re-election effort.

It increases spending by nearly 80 percent over the cost of existing programs at a time when government and private analysts are projecting a budget deficit this year of $100 billion or more. The president has been calling on lawmakers to show fiscal restraint.

CBS News Correspondent Peter Maer reports that the politically-charged measure has been described as a "budget-buster" by critics, including many Republicans. Even Mr. Bush once complained about it, but in an election year with control of Congress up for grabs, he found reasons to sign it.

"It's not a perfect bill, I know that. But you know, no bill ever is," Mr. Bush said with a chuckle, after signing the bill Monday morning at the White House. "There's no such thing as a perfect bill. Or otherwise, I'd get to write every one of them."

Mr. Bush himself had complained that more subsidies would cause overproduction, worsening the plight of farmers, and some Republicans implored him to veto it even after a signing ceremony was set for Monday.

"I would love to see him veto it. It is a budget buster," Sen. Don Nickles, an Oklahoma Republican, said on "Fox News Sunday."

The bill gives farmers incentive to overproduce, Nickles said, predicting it will eventually force farm prices down. "I don't think that helps farmers in the long run," he said.

But Senate Agriculture Committee Chairman Tom Harkin, an Iowa Democrat, said the bill "is the economic plan for rural America and I will be proud to stand with the president as he signs it into law." Harkin is trying to hold his Senate seat this year.

With control of Congress at stake this fall, and Mr. Bush eager to maintain his support in the Farm Belt, politics loomed large over the bill.

"You've got a lot of fairly close races in rural America where this farm bill is the most important thing that comes along every five, six, seven years," Mary Kay Thatcher, a lobbyist for the American Farm Bureau Federation, said after the Senate passed the bill and sent it to the White House last week.

The farm bill raises subsidy rates for grain and cotton growers and revives a target-price system abolished in 1996 to provide supplemental income. The bill also brings back subsidies for wool and honey producers and provides new payments for milk, peanuts, lentils and dry peas.

There is an 80 percent increase in spending on land-conservation programs that will benefit livestock farms and fruit and vegetable growers who historically get little federal cash.

Support for the 1996 Freedom to Farm Act waned after commodity prices plummeted in 1998 and Congress responded with a series of annual bailouts of the farm economy.

The new bill, which essentially continues those bailouts, initially was expected to cost about $170 billion over the next 10 years. However, weaker-than-expected commodity prices are now expected to cause crop subsidies to rise and push the cost to $190 billion.

The bill's increased subsidies have angered foreign competitors. The European Union said it may challenge the subsidies before the World Trade Organization.

Under WTO limits, certain U.S. farm subsidies cannot exceed $19.1 billion annually. However, the bill authorizes the Agriculture Department to adjust subsidies to stay within the cap.

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