Lawmakers are giving themselves more time to finalize a five-year, $560 billion farm bill after Congress late Thursday passed a second one-week extension of the current law, which was set to expire Friday. The bill is expected to include at least $750 million of tax-exempt bonding authority.
However, continued disapproval from the White House regarding the bill's total cost presents a hazard for lawmakers to navigate if the bill is to become law.
President Bush issued a statement Tuesday suggesting he might veto the bill, saying he was disappointed with its "unacceptable" tax revenue provisions, and called on lawmakers to abandon their efforts on the five-year bill and pass a one-year extension of the current law.
Specifically, Bush objects to a revenue provision to help pay for the bill that would require stock brokers to report to the Internal Revenue Service how much their clients pay for stocks, which lawmakers estimate would result in revenues to the federal coffers of $6 billion by making it harder for investors to avoid reporting investment income. Congressional sources indicate that lawmakers are working to find a solution to avoid a veto.
Despite that threat, lawmakers have said they are confident that they will complete the farm bill this week. One major struggle to produce a unified bill had been House conferees' resistance to including several billion dollars of tax credits pushed by Senate members.
House leaders, such as Ways and Means Committee chairman Charles Rangel, D-N.Y., said they did not want to drive up the cost of the bill with the credits, but it appears that most have been included. As a compromise, Senate members scaled back to $1.4 billion from $2.5 billion in additional tax credits.
But even if the conference does manage to agree on the bill within the week, sources said another extension may still be necessary to have enough time to draft all the changes and complete all the paperwork.
Last week, Senate Agriculture Committee chairman Tom Harkin, D-Iowa, wanted to approve a two-week extension to follow the original one-week extension, but resistance from some conference members reduced it to a single week.
While the bill is still being modified, it appears several tax-exempt bond provisions will be included in the final package. To help first-time farmers and ranchers purchase land, the bill contains authorization for states to sell $280 million of "aggie" bonds. Also, the bill contains authorization of $500 million of timber conservation bonds.
It is possible that some tax-credit bonds may end up in the final version of the bill, but it is not certain at this point.
The Senate-approved bill originally called for $1.5 billion of timber conservation bonds, and also created two new categories of taxable tax-credit bonds. One would encourage projects, such as distance learning, telemedicine programs, telephone and broadband access, and community facilities in rural areas. The other is designed to help finance land acquisition subject to native fish habitat conservation plans. Those categories are not part of the conference version of the bill.