House Democrats are forging ahead with writing a massive new tax and spending package with major implications for the next farm bill as well as producers’ finances.
House committees started debating their portions of the budget reconciliation measure last week and will continue into next week. The House Agriculture Committee meets this Friday to divide up the $89.1 billion that it was authorized to spend.
The House Education and Labor Committee, which has authority over child nutrition programs, meets Thursday to consider its part of the bill.
Last week, the House Natural Resources Committee started debating its portion of the package, which includes some funding for a new Civilian Climate Corps as well as provisions to protect endangered species.
The committee’s draft includes $900 million for CCC workers that would be employed by the Bureau of Land Management and $400 million for CCC work at the Fish and Wildlife Service. The bill would provide $150 million to carry out environmental studies required by the National Environmental Policy Act. The committee meets Thursday to continue debating amendments to the draft.
The House Ways and Means Committee is responsible for the bill’s tax provisions, including potential new taxation of capital gains on inherited assets, but the panel will first take up the bill’s health care, family leave and child care provisions during a marathon session scheduled for Thursday and Friday.
Democrats have been negotiating exclusively with each other since no Republicans are expected to vote for the package, and details of the bill have been kept under wraps as well.
A member of the House Agriculture Committee, Rep. Cindy Axne, D-Iowa, said during an online event Sept. 1 in her home state that the bill is likely to include about $20 billion for conservation and research spending. “We've been listening to farmers” in crafting the provisions, she said. But one source familiar with the negotiations said Tuesday that the number was likely to be significantly higher than $20 billion.
A spokesman for the House Agriculture Committee didn’t respond to questions about the spending plans.
The conservation spending is intended for promoting climate-smart agriculture practices and distributed through the next farm bill, which Congress is due to write in 2023. More than 60 groups, including conservation organizations and some farm groups, recently appealed for $30 billion in new conservation funding.
House Ag’s reconciliation also will have additional spending for forestry, energy and farm debt relief programs.
Some farm groups have been caught in the middle over the package. In a letter to congressional leaders on Tuesday, the American Farm Bureau Federation said it was "deeply concerned" about the cost of the package and potential tax increases as well as "the limited ability for stakeholders to engage with lawmakers" on the bill's content.
"While Farm Bureau recognizes that there might be an opportunity to increase funding for voluntary, incentive-based climate and conservation programs, agricultural research and other important farm policy programs, this should be done in a transparent and bipartisan fashion," the letter said.
Democrats have been grappling with internal resistance to some of President Joe Biden’s ideas for paying for the spending package, including his proposal to start taxing capital gains at death. Under current law, inherited assets aren’t taxed until they are sold and only at a stepped up basis, the gain since the heir acquired the assets.
Senate Finance Chairman Ron Wyden, D-Ore., has floated an alternative proposal that would still tax capital gains at death but provide a $5 million per-person exemption and an additional exemption, possibly worth $25 million, for family farms, the Wall Street Journal reported. Under Biden’s proposal, there would be a $1 million personal exemption but no exemption for family farms; the tax on farms would be deferred until the operation is sold.
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Republican members of the committee are appealing to Wyden to debate the tax provisions in committee.
“Failure to hold a full, open markup, as our House Ways and Means and Energy and Commerce Committee counterparts are doing, would amount to a massive and unfortunate concession to the House, as well as to congressional leadership," the Republicans wrote.
“It would also serve to further erode the American people’s trust in the Senate as an open and effective institution, substituting a secretive process behind closed doors for a productive public dialogue.”
Democrats have little room for error in the House, which they control 220-212, and none at all in the 50-50 Senate. Sens. Joe Manchin, D-W.Va., and Kyrsten Sinema, D-Ariz., have both expressed reservations about spending $3.5 trillion as called for in Democrats’ fiscal 2022 budget resolution that authorized the reconciliation bill.
Manchin privately told the White House that he wouldn’t support more than $1 trillion in spending, Axios reported Tuesday evening.
But White House Chief of Staff Ron Klain insists that he’s optimistic about the bill’s chances. “We’re going to work together to find a way to put together a package that can pass the House, that can pass the Senate, that can be put on the president’s desk and signed into law,” Klain said Sunday on CNN’s State of the Union.
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