News

Stopgap farm bill passes, averting ‘dairy cliff’

Stopgap farm bill passes, averting ‘dairy cliff’

DAIRY PRICES: Some of the 500 head of dairy cows owned by Brian Brown of Sunburst Dairy eat late morning in Belleville, Wisconsin Sept. 6, 2012. Photo: Reuters/Darren Hauck

WASHINGTON (Reuters) – The U.S. House of Representatives passed a stopgap farm measure on Thursday to avert a potential doubling in dairy prices next month while lawmakers wrap up a new farm bill that cuts food stamps for the poor and expands subsidized crop insurance.

Lawmakers passed the bill, which extends current law until Jan. 31, on a voice vote and sent it to the Senate, where the Democratic leaders oppose it and chances of passage are low.

The four top farm bill negotiators hope to agree soon on a framework for the new law so it can be passed when Congress returns to work in the new year.

“Pass the extension … and we on the Agriculture Committee will take care of our business in January,” said Frank Lucas of Oklahoma, the committee chairman. He said House and Senate negotiators were making “incredible” progress on a compromise bill.

Debbie Stabenow of Michigan, who chairs the Senate Agriculture Committee, says a sizable number of senators oppose the extension because it may trigger $5 billion in “direct payment” subsidies to growers. The new farm bill would end those subsidies.

In addition, Democrats argue the “dairy cliff” – an explosion in dairy prices caused by an underlying 1949 law – is a fiction.

“It’s not necessary,” said Rep. Jim Costa, California Democrat, in opposing the extension. Costa and Lucas were the only lawmakers to speak during the House debate.

Congress is more than a year late in replacing the 2008 farm law, which expired in fall 2012 but was extended until September 30. Dairy subsidies will revert on Dec. 31 to terms of an underlying 1949 law that would double the price of milk in grocery stores.

Agriculture Secretary Tom Vilsack told reporters on Wednesday that “it is unlikely we would have that (price increase) in place” during January. It was the second time he ruled out an immediate price increase.

All the same, Lucas said the temporary extension was a prudent step that would end “panic” at the possibility of $8 a gallon milk.

“We are making significant progress in our negotiations with the Senate,” said Lucas. “I’m confident we will complete the conference report in January.”

The major issue for the farm bill is the size of cuts in food stamps for the poor.

Majority Leader Eric Cantor spearheaded the House call to cut $40 billion over 10 years with tighter eligibility rules that would disqualify up to 10 percent of food stamp recipients. The Senate voted for $4.5 billion in cuts by closing a loophole on utility costs.

Enrollment in food stamps has doubled and the cost of the program nearly tripled since 2004.

Recent Headlines

yesterday in National

Calls for peace at Kansas shooting memorial

kansas

The scene of a hate crime just days ago became the setting for tears, prayers and calls for peace.

yesterday in National

Obama budget plan would boost U.S. tax revenue, cut deficits

obama

The Congressional Budget Office says the 2015 budget could boost tax revenues while slashing deficits by $1.05 trillion.

yesterday in Sports

Thursday’s Sports Minute

durant

The Thunder secure No. 2 seed, the Cubs' visit to Yankee Stadium doesn't go well, and more.

yesterday in National

Jobless rates hover at near pre-recession levels

jobs

New applications for unemployment benefits held near their pre-recession levels last week.

yesterday in Sports

Wall Street fund managers buy Milwaukee Bucks

bucks

Hedge fund managers are buying the Milwaukee Bucks for $550 million, becoming the latest Wall Street financiers to own a sports club.