Ag Disaster Aid Package Part
Of Massive, Mysterious Budget

WASHINGTON — An almost $6 billion agriculture disaster aid package is one small element in the half-trillion-dollar "omnibus" budget bill passed Tuesday by the U.S. House and facing likely Senate approval at presstime.

Precisely what it includes is uncertain, inasmuch as few of the legislators voting on the massive appropriations bill have actually had an opportunity to read it. The mystery budget was hammered out late last week after days of negotiating between the Clinton White House and legislators from both parties.

Even the negotiators admitted they didn’t know for sure what they had agreed on; hundreds if not thousands of details were still to be plugged in this week in time for something to be put on paper for a vote. How many surprises will be contained in the 16-inch thick, 40-pound bill — and how long it will take them to squirm out into the daylight — remains to be seen.

As best it can be determined, however, the ag disaster portion of the bill contains $1.6 billion for market losses, a billion and a half for crop disasters, $875 million for multiple-year crop loss assistance, and $200 million in emergency livestock feed relief.

Other provisions in the bill reportedly provide an estimated $1 billion in tax relief, including permanent use of income averaging, an increase in the net operating loss carryback period from two to five years, full deductibility for health care premiums by the year 2003, and a new savings account that could be used to even out good and bad years by allowing tax-deferred deposits of up to 20 percent of net ag income.

In addition, the bill will reportedly direct USDA to conduct a 12-month pilot study of mandatory price reporting on whole-muscle meat trades as well as an electronic system for collecting data on fresh and frozen meat exports.

It is also loaded with goodies for specific constituencies, some of them more defensible than others.

The peanut industry, for example, won a provision prohibiting the government from spending money to enforce a threatened plan requiring "peanut-free" airline flights. The goober-less travel scheme was hatched by federal bureaucrats, reportedly after four people with allergies claimed they feared involuntary ingestion of peanuts that might be sucked into an aircraft’s ventilation system.

Meanwhile, the dairy industry, never out of arm’s reach when there is tax money to be handed out, maneuvered a provision into the bill to provide $200 million in subsidies for milk, which is currently at record high prices even as production costs tumble because of the forecast grain glut.

The dairy handout, as large as the entire drouth feed program, was not included in either the Republican-backed ag appropriations bill vetoed by President Clinton or the much more costly version sought by Clinton and many Democrats. How it appeared in the "compromise" is so far unexplained, except that it was backed by a Wisconsin Democrat who initially demanded half a billion dollars before bargaining down to the $200 million figure.

The dairy largesse is already providing ammunition for scathing editorials among major urban newspapers, such as one in Wednesday’s Washington Post that tends to lump all agriculture producers together as "pigs at a trough," "helping themselves" to "billions and billions of welfare dollars."

Meanwhile, congressional Democrats are calling for still more largesse in the form of major changes to the 1996 "Freedom to Farm" bill, which attempted to return legitimate market forces to agriculture policy.

"The farm policy that passed the last farm bill is fatally flawed. It makes no adjustment for dramatic price declines," said Sen. Kent Conrad, D-N.D. "If you don't have some buffering mechanism it leads to a lot of economic wreckage."

"We're seeing the terrible effects of a farm program that does nothing when prices collapse," chimed in Rep. Earl Pomeroy, D-N.D. "For decades we had a farm policy that offered some policy against price collapse, and we need to restore it."

Republicans have rejected any notions of reversing the farm bill and even blocked a Democratic proposal in the farm aid package that would have provided for $5 billion in price supports, saying it was a throwback to the days before the 1996 farm bill.

Agriculture Secretary Dan Glickman said he plans to push for changes in crop insurance next year, which Republicans envisioned two years ago as taking the place of disaster assistance.

Even Republicans agree there are problems with insurance, which doesn't work in places where calamities have happened several years in a row because policies are based on past crop yields.

"The next session of Congress is going to have a great responsibility to review crop insurance, to make it workable and to expand it," said Rep. Bob Smith, R-Ore., chairman of the House Agriculture Committee.

But Republicans have already indicated they are not open to any proposals that may restore a subsidized safety net.

"We think in the long term, crop insurance is the answer to a safety net," Smith said.