A Sticking Point in the Farm Bill
The $290 billion farm bill has been stuck in Congress for months as lawmakers wrestle over tax and policy questions. If the differences can't be resolved, billions in farm subsidies as well as increases for nutrition, conservation and energy programs will die.
Now, it turns out, one of the biggest sticking points is a proposed $435 million one-year tax break that would benefit multinational timber companies and smaller operators in states represented by some key lawmakers, reports Dan Morgan.
The tax break has long been near the top of the legislative wish list of the American Forest and Paper Association (AFPA). It would cut the taxes on gains from timber sales from 35 percent to 14.4 percent.
The top Senate advocate for the measure, Blanche Lincoln (D-Ark.), has close political ties to her state's timber industry, and since 1998 has received campaign contributions of at least $38,000 from timber company officials, along with $25,000 from the political action committee of Weyerhauser, Inc., the giant multinational.
Among her long-time political supporters is Aubra H. Anthony Jr., president and chief executive of Anthony Forest Products, Inc., of El Dorado, Ark. In 2005, Anthony chaired the AFPA board. His cousin, former Rep. Beryl Anthony (D-Ark.), has served as chairman of the family timber company's board.
A Lincoln spokeswoman said that the benefits the company would receive from the farm bill provision are "very limited," because Anthony Forest Products is now organized in a way that already allows it to take advantage of a lower tax rate. But she added: "As a member of the Arkansas Forestry Association and the American Forest and Paper Association, which have both endorsed the provision, the company is supportive of the measure."
House members attempting to negotiate a farm bill deal with the Senate have strenuously objected to the provision. Without specifically mentioning timber, Rep. Bob Goodlatte (R-Va.), ranking Republican on the Agriculture Committee, charged last week that such one-year-only tax breaks would likely lead to annual extensions that could billions of dollars.
In a strong plea to retain the provision, Lincoln--a member of the Agriculture Committee panel that oversees forestry--told House-Senate farm bill negotiators last week that some 3,000 jobs had been lost recently in her state's timber industry. The Senate approved the provision last year as part of its version of the farm bill. It was also attached to a House-passed energy bill but was later dropped.
Donna Harman, AFPA president, said removing "tax penalties" would "put U.S. forestry on a level playing field with competitors around the world."
Separately from the timber measure, a $257 million provision backed by Sen. Max Baucus (D-Mont.) would have U.S. taxpayers pay interest on "forestry conservation bonds" used by states to acquire conservation lands. A December article by Bloomberg News suggested that a prime beneficiary could be Baucus's state of Montana, which could use bonds to buy land from Plum Creek Timber Co., largest private landowner in the state. House Republicans have called the measure a special-interest earmark. Baucus has said that his goal is to protect precious natural resources from commercial development.
Senate negotiators have refused to yield to House demands to trim their $2.4 billion tax package. But Sen. Kent Conrad (D-N.D.) said yesterday that negotiators were "on the brink of a breakthrough" to finish the farm bill.
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Posted by: Stephaney | April 30, 2008 12:29 AM