House Passes Farm Bill

By July 27, 2007General

CQ reports:

By 231-191, the House passed the farm bill (HR 2419) after dispatching 31 amendments aimed at shifting its priorities. The measure would allocate $286 billion over five years.

Ag Secretary Mike Johanns spoke at the National Press Club today; we just happened to catch his comments about the politics of the bill having become polarized because of the unexpected tax increases added to pay for some of the programs, i.e., the tax increase on companies that invest in the United States. (Previous posts here and here).

Johanns’ comments add context to this CQ observation: “Realizing he could no longer count on GOP support for his bill, Agriculture Committee Chairman Collin C. Peterson, D-Minn., went into overdrive cutting deals with undecided Democrats to put together the majority needed to pass it.”

The USDA is good about posting the Secretary’s comments, so the Press Club transcript should be up next week. Here’s a transcript of his July 25th tele-conference.

UPDATE (5:15 p.m.): Via the Organization for International Investment, a copy of Secretary Paulson’s letter opposing the tax increase provisions of the farm bill. Key paragraph:

This tax proposal would override all of the United States’ existing tax treaties, disrupting current investment into the United States, and undermining our ability to negotiate future tax treaties. The tax proposal would raise taxes on foreign investment into the United States, thus discouraging such investment and the resulting job creation. Foreign-owned companies provide, directly and indirectly, millions of jobs in the United States. Moreover, the tax proposal is overbroad, affecting far more than potential “earnings stripping,” and it would adversely affect the United Stats’ relationships with our major trading partners. In fact, the tax proposal may even cause other countries to retailiate, raising taxes on U.S. companies with multinational operations.

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