Environmental Law

Farm Bill Confrontation Looms as President Balks at Legislation

By Dennis Pfaff and Kevin Livingston, Editors

Prospects for a new farm bill that, among other arguably more controversial provisions, trims the federal subsidies for some forms of ethanol, remained uncertain at week's end because of continued criticism from President Bush.

That was despite support from a variety of leading lawmakers and interest groups ranging from House Speaker Nancy Pelosi to the American Farm Bureau Federation.  Both issued statements endorsing the legislation that emerged earlier this week out of congressional negotiations and appeared headed for votes in both the House and Senate (see Pelosi statement here; Farm Bureau statement here).

Sen. Tom Harkin, the Iowa Democrat who chairs the Senate Agriculture Committee and the House-Senate conference panel that came up with the compromise bill, announced the agreement on a bill Thursday (access statement here). 

According to news reports, the bill includes provisions calling on the federal government to buy surplus sugar and sell it to ethanol producers, where it would be used in a mixture with corn. It also would cut a 51-cent-per-gallon ethanol tax credit that supports blending fuel with the corn-based additive to 45 cents. It would favor putting additional money into cellulosic ethanol, which is made from material such as grasses and woody plants (see Associated Press dispatch here).

Those latter provisions were the same or similar to earlier versions of the bill (see Climate Law Update story here).

The White House ripped the legislation, releasing a statement (see text here) that called it "bad for American taxpayers," and saying the bill would increase spending by as much as $20 billion and failed to include what it called "much-needed farm program reforms." Although much of the statement focused on subsidies to wealthier farmers at a time of record crop prices, it also singled out the sugar-to-ethanol provision for special criticism:

"The farm bill not only fails to reform the sugar program but actually increases government intervention to drive up sugar prices. This law would support sugar at nearly double the world market price and control supplies to assure that domestic growers meet 85 percent of domestic consumption. Any excess supply, which could be available for food production, would be owned by the government only to be auctioned to ethanol facilities at a huge loss."

In her statement praising the legislation, Pelosi also cited some of the bill's aspects related to fuels production:

"To help transition biofuels from corn, the farm bill reduces the current tax credit for corn-based ethanol and creates a new tax credit to promote the production of cellulosic biofuels."

What happens next is not certain, although Pelosi's hometown newspaper, the San Francisco Chronicle reported that Bush's opposition "sets up an effort" by Democrat Pelosi and congressional Republicans to override the president's likely veto (see story here). The Chicago Tribune reported that lawmakers planned to take up the bill next week and send it to the president's desk (see story here), and the Washington Post agreed that  a vote could be held next week (see story here). 

(White House photo)

Full post as published by Climate Law Update on May 09, 2008 (boomark / email).