The reform measure would have closed loopholes and capped direct payments at $250,000 while reinvesting the savings in nutrition programs, conservation, and rural development initiatives. However, the amendment failed on the floor of the Senate. It received 56 votes, which would have been enough to pass under normal circumstances, but because of obstruction from Senator Lincoln (D-AR), the amendment was forced to get a supermajority of 60 votes to pass.
However, Senator Grassley isn't done arguing for stricter payment limits. Last week, he wrote a letter to leaders of the House and Senate Agriculture Committees. Using data from the IRS, he argued that an income limit, which is supported by President Bush, would not be very effective in eliminating subsidies to wealthy farmers and landowners. To sidestep an income cap, many landlords would switch to cash rents instead of shares, reinvest income in expanding their operations, or just hire a good accountant to keep their stated income below the limit. Additionally, Bush's recently approved economic stimulus package encourages tax write-offs for business investments, so this combined with an income limit would give further incentive for consolidation. Grassley argued that his and Dorgan's proposal to cap payments at $250K would be more effective than an income limit test.
On the other side of the spectrum, Senator Lincoln also made it loud and clear that she would fight her hardest against any further attempts at payment limitations, which she argues would hurt Southern farmers. Both Senator Grassley and Lincoln are on the conference committee, where the differences between the Senate and House versions of the bill will be negotiated.
Vote Result
Score: 0.0, Votes: 0