Farm Bill News: Nancy Pelosi Indicates Support for Subsidy Reduction

According to the .National Journal's CongressDaily PM (sorry I can't link to the article, but National Journal keeps its articles behind a firewall), Speaker Nancy Pelosi told House Agriculture Chairman Petersen that she wants "stricter limits on farm subsidies for individuals as a symbol of Farm Bill change." The reporter, Jerry Hagstrom, quoted Petersen as saying, "Payment limits would do the most good to show reform." He is considering a proposal, according to Hagstrom, that "would end the three-entity rule that allows farmers to receive subsidies from three separate farming operations but would not place restrictions on their gains from marketing loans." Hagstrom reported that "the proposal would also lower -- but [Petersen] would not say by how much -- the $2.5 million ceiling on the adjusted gross income above which farmers cannot qualify for farm subsidies." He also reported that another change would limit the subsidies on a farm to a farmer and his or her spouse.

So, what does this mean? I take it as good news that Pelosi supports some kind of subsidy change, even if the changes are relatively modest. My guess is that she's heard enough from farmers and activists in California that she'll do what she can to try to change the subsidy scheme and diffuse the flow of federal farm subsidy dollars away from the Mid-West and from big farms. I do not have information now about on what's going on in the Senate, and I don't know how aligned or divergent the two houses are in their thinking. One other possibility is that President Bush could threaten to veto the bill if he's displeased with the changes Pelosi hopes to implement. In that event, according to Hagstrom, Petersen suggested to Agriculture Secretary Johanns that the 1949 Permanent Farm Act would become governing federal farm policy. I am not at all familiar with that act, but failure to reauthorize the act might be the best way to bring an end to federal farm subsidies. It won't happen. No one will let this bill sunset, and frankly, a lot of good programs would die if the bill expired. Be that as it may, I'm intrigued by the idea of how a veto threat might play out.

Finally, Hagsterom reported on one other interesting piece of news: Congressman Goodlatte has not yet signed on to Petersen's version of the Farm Bill. He is, according to Hagstrom, holding out until Petersen makes clear how he intends to pay for sections of the bill with offsets from other programs. More than anything else, Goodlatte represents the administration at this point in the process, but because of the makeup of the House he's more or less powerless when it comes to determining the content of the bill. Of course, I could be wrong, if the content of the bill is decided along regional and not party lines, he may have the ability to sway non-midwestern members who do not represent constiuents who reap great benefits from the current subsidy scheme. If all the votes during the mark-up fall along party lines, he will be sidelined.