House and Senate lawmakers are struggling to reach an agreement on the provisions that should be included in a farm bill to be presented to President Bush after Senate members proposed a package with only one tax-exempt bond provision that was opposed by key House lawmakers this week.

On Monday, Senate Finance Committee chairman Max Baucus, D-Mont. and ranking minority member Sen. Chuck Grassley, R-Iowa, offered a $2.5 billion agriculture tax package under ongoing conference negotiations to resolve differences between the House and Senate bills. The package contained only one bond-related provision. It would authorize $280 million of "aggie bonds," which are tax-exempt bonds that would be used by first-time ranchers and farmers to purchase land.

The proposal marks a significant departure from the bill passed by the Senate in December, which would have authorized $1.5 billion of tax-exempt timber conservation bonds, as well as created a new category of taxable tax-credit bonds for projects such as distance learning, telemedicine programs, telephone and broadband access, and community facilities in rural areas.

Hill sources said some tax-credit bonds may make their way into the final bill, but there is no certainty at this point.

Despite the proposed compromise that contained the one bond provision, the Senate's offer was met with resistance from the House leadership. Ways and Means Committee chairman Charles Rangel, D-N.Y., told Senate lawmakers on Monday that he does not have the backing of House leaders to consider the tax incentives, as it was not part of the $10 billion tax package agreed to previously by the lower chamber. Rangel said House Speaker Nancy Pelosi, D-Calif., agrees with him on the matter.

As Democrats in Congress attempt to adhere to pay-go rules, funding for the bill also would be a sticking point.

House Agriculture Committee chairman Collin C. Peterson, D-Minn., has said that the House could accept the $10 billion over 10 years in agriculture provisions in the Senate measure - $6 billion for agriculture and $4 billion to establish a permanent disaster-relief fund. However, it is not clear where the money would come from because House leaders are against any tax hikes.

Meanwhile, the clock is ticking, as the 2002 extension of the farm bill expires on April 18, and lawmakers have said an agreement must be reached by the end of today if it is to be signed by the president and enacted into law in time.

 

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.