9-Month Extension of Farm Bill Passes with Fiscal Cliff Legislation (Updated)
With a vote of 257-167 late Tuesday night, the House of Representatives concurred with the Senate in passing a package to avert the "fiscal cliff" that includes an extension of the 2008 Farm Bill, funding and authorizing key farm, research and nutrition programs through the end of the 2013 fiscal year in September.
In the final hours, Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) found herself pushed aside in favor of legislative language generated by the office of Minority Leader Mitch McConnell (R-Ky.), a bit player and frequent “no” vote when the Senate adopted a more comprehensive five-year farm bill last June.
McConnell’s role in the tax talks gave him immense leverage, while Stabenow was hurt by committee infighting over her efforts to write a more comprehensive farm bill extension that included changes in the dairy program.
The upshot is a victory for Southern agricultural interests with the greatest stake in a costly system of direct cash payments to often already profitable producers. In the dairy arena, giant processors like Dean Foods Co. come out ahead while the outcome is a major blow for the National Milk Producers Federation, which watched with disbelief from the sidelines on New Year’s Eve.
The package permanently extends current tax rates for families earning less than 450-thousand dollars a year and permanently patches the alternative minimum tax. Automatic, across-the-board spending cuts that were scheduled to start this month will be postponed for two months. The estate tax – which was set to increase from 35-percent to 55-percent – will increase to a 40-percent tax rate with a five-million dollar exemption. Capital gains and dividend tax rates for those earning less than 450-thousand are permanently extended – while rates for those earning more will increase from 15-percent to 20-percent. The measure also extends the 2008 Farm Bill for the rest of the fiscal year. Because the votes came after the December 31 deadline – the final deal will take place retroactively so tax rates continue uninterrupted for most American taxpayers.
Ahead of the vote – House Minority Whip Steny Hoyer urged his colleagues to vote not as Democrats and Republicans – but as Americans who understand that the people believe action is needed. Hoyer also expressed some regret that the plan was not big, bold and balanced. He said there was an opportunity to reach such an agreement in a bipartisan fashion – adding that a big, bold, balanced plan isn’t possible without bipartisanship.
On Thursday, we'll have more from NC Farm Bureau president Larry Wooten on the farm bill extension.