House conferees named•ball is finally rolling

For the full article, click on the headline above. 

Everyone was watching for House Speaker Nancy Pelosi to name House farm bill conferees, an indication a deal was near. And last night she did that, setting in a motion hopefully an 8-day sprint to the finish line before the April 18 expiration of the current 2002 law. Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, will chair the committee and called for the first meeting at 10:15 today (April 10). Click here to listen to the meeting live. View the full list of House conferees and Senate conferees.

Earlier yesterday (April 9), Rep. Bob Goodlatte, the ranking Republican on the House Agriculture Committee, successfully sought a procedural move that would prevent any new spending in the farm bill from coming from new taxes. Goodlatte's "motion to instruct" House conferees to vote against any tax-raising measures passed the House on a strong bipartisan vote last evening.

That paves the way for a conference that may rein in Senate attempts to add a tax package to the farm bill that had been opposed by House Ways and Means Chairman Charles Rangel. It may also be an obstacle to a permanent disaster program sought by Senate Finance Committee chairman Max Baucus. D-Mont., and Senate Budget Committee Chairman Kent Conrad, D-N.D. Many House Republicans voted against the farm bill passed by the House last July 27 because of White House opposition to spending it saw as a tax increase.

And if Harkin can't get an agreement on a bill $10 billion above baseline - or the funding threshold of the previous farm bill - he's got a back up plan. He said Wednesday he's "scrubbed" the farm bill to find savings to fund high priorities, coming up with $9 billion to be reallocated.

One of the "scrubbings" was scaling back direct payments, maybe as much as a 2% cut. Harkin said that taking $20 out of a $1,000 payment should be relatively painless for program beneficiaries and noted that it could raise $1 billion in savings.

House Ag Committee Chairman Collin Peterson has used a lull in farm bill action to search for savings. Tuesday he unveiled a concept that would make free up $1.4 billion for the farm bill from federal crop insurance premium subsidies. Those payments have come under attack because high crop prices have spiked the premiums, resulting in higher government obligations to pay its share of administrative and operating costs. Peterson's plan, which he spoke about only in generalities, would create a sliding scale for reimbursing crop insurance companies for such "A&O" expenses.

The proposal creates the scaled reimbursements by taking into consideration by ranking each state's premium history and comparing that to a ranking of the state's loss history. The government would realize savings by eliminating excess profits to companies where there is little new risk or new work generated even though the cost of the insurance has steeply increased, Peterson said. "The effect is to make cuts in states where there have been additional excess profits," he explained. 

The plan was developed after consultation with the nation's top crop insurance experts and with the USDA's Risk Management Agency, he said. The insurance industry so far has not found major complaints with the proposal, which the Congressional Budget Office has scored at $1.4 billion in savings over 10 years. The first five years of the program would result in $500 million in savings.