House Dems Expect Farm Bill Will Pass

Democrats said Thursday they have the votes to pass a broad, five-year U.S. farm bill this week, despite the party's internal divisions and Republican outrage over tax increases on foreign-owned companies to pay for it.

Support for the bill, which extends agriculture and nutrition programs, unraveled Wednesday as the White House threatened a veto, saying the legislation does not do enough to cut farm subsidies, a contentious issue in international trade talks.

At the same time, farm-state Republicans who previously supported the bill have said they will oppose it because of a last-minute proposal to tax certain foreign-owned companies with U.S. subsidiaries. Those taxes would partially pay for $4 billion in food stamps and other nutrition programs that benefit mainly urban areas.

With the business community lobbying vigorously against the measure, Treasury Secretary Henry Paulson wrote Congress on Thursday saying the plan would cost U.S. jobs by disrupting foreign investment and ruining relations with trade partners.

"The tax proposal would raise taxes on foreign investment into the United States, thus discouraging such investment and the resulting job creation. Foreign-owned companies provide, directly and indirectly, millions of jobs in the United States," Paulson wrote to Rep. Jim McCrery, the top Ways and Means Committee Republican.

Facing defeat from a loss of Republican support, House Agriculture Committee Chairman Collin Peterson, a Democrat, said Thursday that he had been up most of the night working with the leader of the House of Representatives, Speaker Nancy Pelosi, to gain votes from Democrats who have opposed certain parts of the legislation. Peterson and Pelosi agreed to shift money to international nutrition programs, for example, to gain support from Rep. James McGovern, a Democrat.

"My sense is there's not going to be many Democrats who vote against this," Peterson said. "We got the votes."

Republicans, though, have said they view the tax proposal by Rep. Lloyd Doggett, a Democrat, as a betrayal of the previously bipartisan effort to pass the bill.

Doggett said the plan would not affect "legitimate multinational corporations that are not employing a haven to dodge American taxes."

Despite leadership efforts to unite the majority, some Democrats were still opposed. Rep. Ron Kind, a Democrat, offered an amendment that would scale back subsidies in favor of conservation, aid for specialty crops like fruits and vegetables, and nutrition and rural development programs.

Agriculture Secretary Mike Johanns, citing the farm subsidies, said the legislation misses opportunity for reform. The bill would ban subsidies to farmers whose income averages more than $1 million a year and stop farmers from collecting payments for multiple farm businesses, but an administration proposal would go further.

Peterson denounced the veto threat, saying the administration had "failed rural America and all Americans" by opposing a measure that has broad backing from agriculture, conservation, nutrition and renewable energy advocates.

The current farm law expires Sept. 30. The Senate is due to begin its consideration of the legislation in September. Its bill would have to be reconciled with the House version.

A Glance At Where The Money Would Go In House Farm Bill

The Bush administration is complaining that the House farm bill spends too much on farm subsidies. Yet food stamp entitlements and other nutrition programs administered by the Agriculture Department are a much bigger piece of the $286 billion pie. All numbers are five-year estimates:

• Subsidies and other help for farmers, $42 billion.
  
• Conservation programs designed to help protect the land, $25 billion.
  
• Food stamps and other nutrition programs, $190 billion.
  
• Other, including rural development, research and energy programs, $29 billion.