$451 million in tax breaks for timber companies. Ka-ching. $500 million for biodiesel. Ka-ching. $126 million for racehorse breeders. Ka-ching. $20 million for Aggie bonds. Ka-ching.
It is farm bill time, so grab your wallet. When it comes to agricultural subsidies, there are no deficit hawks. There are only farm-state lawmakers, for whom no subsidy is too great, and big city pols, who can only watch in envy.
It looks as if House and Senate conferees have agreed to a $300 billion, five-year bill which leaves no special interest unturned. Although final details are still unclear, the measure will pass next week with the overwhelming support of both Democrats and Republicans. No nasty partisanship here. And the White House is beginning to make noises that the President will let the bill become law, even though Bush has, rightly, threatened to veto it in the past.
Backers say the bill is fiscally responsible. They point to a small future cut in ethanol tax credits from 51 cents to 45 cents. Sounds good, although I have a funny feeling the credit won’t ever be reduced. Reductions in out-year tax cuts never seem to happen. Instead, they become yet another tax extender.
The other alleged nod to fiscal responsibility is an agreement to eliminate some subsidy payments to farmers who make more than $750,000, or $1.5 million per couple. Bush tried to cap the payments for those earning $200,000 or more. But that was a long time ago. I’ll let you decide whether this particular glass is half-empty or half-full.
And never fear, there are plenty of winners. It appears that just one company, timber giant Weyerhaeuser, stands to gain $100 million a year in tax breaks. While Congress may trim subsidies for ethanol, it would add $537 million in tax breaks for biodiesel and renewable diesel And, having learned nothing from the ethanol debacle, it would create a “temporary” credit of $1.01 per gallon for biofuels made from farm waste, switch grass and the like. Another tax extender in the making.
Fiscal conservatives just roll their eyes at these bills. It is a good year if they can just limit the damage.
