(Archived document, may contain errors)
12/3 /85. 101
THE FARM BILL STILL DESERVES A VETO
A fter nearly a year of deliberation and debate, the Senate passed
its version of the 1985 farm bill on November 23. The House passed
its farm legislation on October 8, and a conference committee will
convene to resolve the differences. There are many important
distinctions between the two bills, but they are alike in one key
respect--they are bad news f o r U.S. taxpayers and consumers and
poorly targeted relief for embattled farmers. Unless the farm bill
presented to Ronald Reagan differs significantly from the two
existing bills, he should veto it. Failure to veto would delay farm
reform for at least ano ther four years. What is worse, failure to
veto would send a message to Congress that Reagan is not serious
about cutting spending.
The farm bills do make several crucial reforms. For the first time,
price support rates would be tied to market prices, rath er than to
some arbitrary price set by Congress. This should lower the price
of U.S. commodities to competitive levels and thus boost farm
exports. At the same time, however, the farm bills would increase
direct cash subsidies to farmers. Initial estimate s place the cost
of the Senate bill at $55 billion over three years--$20 billion
more than Congress's own budget "limits-" The House bill would cost
even more. Yet these increased subsidies would do little to help
struggling farmers, as only 17 percent of t he money would go to
full-time farmers in financial distress. Neither bill makes any
effort to target these funds to those in need. Even worse, the
House bill would establish a bizarre new "diversion" program, by
which the federal government would pay dai r y farmers not to
produce milk, despite the fact that such programs have not worked
in the .past. This proposal would require a new tax on dairy
farmers to pay for its costs, cause local milk shortages in many
areas, and disrupt other farm sectors, requiri ng the creation of
even more subsidy programs. The Senate takes the right approach on
this matter. It would simply reduce dairy subsidies, thus reducing
the cause of overproduction. It would not begin to do so, however,
until 1987.
Reagan should state cl early and unequivocally that he will not
sign any farm bill unless significant changes are made. He should
identify the changes required for a bill to escape a veto,. so that
lawmakers do not have to second-guess the White House. At the very
least, the ch a nges should include: 1) Adherence to the spending
limits set by Congress itself in its Budget Resolution. The only
reason for any adjustments in the budget figure should be recent
revisions in farm crop estimates. 2) Reduction of dairy price
supports in 1 9 86, with no dairy "diversion" program. By making
his specific intentions known to Congress well in advance, Reagan
could make his veto threat a constructive tool for improving the
legislation now--before the conference committee makes revisions. A
clear w h ite House position also would help the President marshal
public support for his.position. Throughout this year,
Administration officials have stated many times that Reagan would
not hesitate to veto irresponsible spending bills presented to him.
The farm l egislation will be one of the most important spending
bills to reach his desk in his second term. Were he to sign it
without significant changes, it would signal Congress and the
special interests that Reagan is not really serious about cutting
spending a nd will not use his veto power to control it. That-would
encourage even more costly spending bills-in.the future.
While the farm bills pending before Congress make several needed
reforms, they still impose unacceptable costs on taxpayers and the
economy. T he President must wield his veto to force
needed-improvements in the final bill--to trim the fat while
securing passage of long overdue reforms. Failure to do-so will
damage the farm economy and jeopardize the President's'efforts to
control federal spendi ng.
James L. Gattuso Policy Analyst
F or further information:
James L. Gattuso, "The Farm Bill: Begging for a Veto," Heritage
Foundation Executive Memorandum No. 99, October 30, 1985.
James L. Gattuso, "The 1985 Agricultural Bill: Still Time to Treat
the Farm Crisis," Heritage Foundation Issue Bulletin No. 119,
September 13, 1985.
"Breaking Eggs," The New Republic November 11, 1985, p. 7-8.
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