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Obama vs. Rich Farmers?

POSTED: 04:18 PM ET, 11/ 6/2008 by The Editors

The election of Sen. Barack Obama (D-Ill.) may reopen the issue of lowering the ceiling on federal subsidies to farmers, a hot potato during negotiations over the recently enacted farm bill.

Obama, who hails from one of the nation's top farm states, has been generally supportive of the farm safety net--but only up to a point. He favors capping subsidy payments, which in some categories are unlimited, at $250,000. And his web site says the payments should go "to farmers who need them, not millionaire farmers who rely on American taxpayers to protect their multimillion dollar profits."

If he does seek to pare back the payments to the richest farmers, he would have a powerful ally in Sen. Charles Grassley (R-Iowa), ranking Republican on the Senate Finance Committee and a longtime supporter of payment limits for farm subsidies.

During a weekly conference with home-state reporters this week, Grassley said his payment limit plan "would have a good chance of passage, considering how bad the budget situation is." Grassley projected savings of $600 million to $1.3 billion over 10 years.

Congressional aides said it is almost certain that farm payments will be targeted for savings if Democrats push for a revamped budget with new priorities. Farm subsidies were the subject of a Washington Post investigation in 2006.

The 2008 farm bill closed several loopholes and limited to $210,000 the amount a farm couple could receive from two key subsidy programs. But limits on federal price supports were removed, and a Bush administration effort to deny subsidies to individuals with adjusted gross incomes over $200,000 failed.

The final farm bill denied subsidies to those with incomes above $500,000--or $750,000 if it was earned from farming.

Democratic inroads in rural areas and formerly "red" states in the South and Midwest could persuade the president-elect to move cautiously, said aides on Capitol Hill. Democrats are also mindful that three of the four House Democrats who lost Tuesday were red state freshmen on the House Agriculture Committee.

In the past, Obama has criticized lavish subsidies and protections for sugar growers, citing the impact of high sugar prices on Illinois candy manufacturers. But he promised Minnesota and North Dakota beet producers last month that he was willing to hear them out. "I believe we should reward your hard work with policies that will keep your industry strong," he said in an Oct. 21 letter.

— Dan Morgan


By The Editors |  November 6, 2008; 4:18 PM ET Harvesting Cash
Previous: Spitzer Won't Be Charged in Prostitution Case | Next: Emanuel's Role at Freddie Mac, Pleas Filed in Obama Plot, Post-Campaign Complaints

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