S. 1246 - Crop Year 2001 Agricultural Economic Assistance Act, 07/30/2001

July 30, 2001

S. 1246 - Crop Year 2001 Agricultural Economic Assistance Act
(Sen. Harkin (D) Iowa)

The Administration strongly opposes S. 1246 as reported by the Committee on Agriculture, Nutrition, and Forestry, because spending authorized by the bill would exceed $ 5.5 billion, the amount provided in the budget resolution and the amount adopted by the House. If S. 1246 is presented to the President at a level higher than $5.5 billion, the President's senior advisers will recommend that he veto the bill.

The budget resolution provides $5.5 billion for 2001, an amount that the Administration strongly believes is more than adequate for this crop year. Moreover, improvements in agricultural markets and stronger livestock and crop prices means that the need for additional federal assistance continues to diminish. An additional $5.5 billion in federal assistance will boost expected real U.S. farm net-cash income to $53.6 billion (1996 dollars), a level of income significantly above the previous two years. With the need for additional assistance well within the $5.5 billion provided, the expenditure of funds allocated for 2002 in crop-year 2001 would be premature. In addition, the bill provides funding for a number of programs that have nothing to do with farmers' 2001 incomes. Funding for these programs should not be included as part of a 2001 farm income assistance bill.

To ensure that assistance can be made available to the Nation's farmers and growers as soon as possible, the Administration strongly urges the Senate to approve H.R. 2213 as passed by the House of Representatives. The Administration also urges that the Senate refrain from adopting any extraneous amendments that could slow the timely enactment of this bill. The House-passed bill provides $5.5 billion in assistance, which is the amount provided for in the budget resolution and the maximum amount the Administration would support.

Pay-As-You-Go Scoring

S. 1246 would increase direct spending and, therefore, would be subject to the pay-as-you-go requirement of the Omnibus Budget Reconciliation Act of 1990. OMB's preliminary scoring estimate of this bill is that it would increase direct spending by $7.4 billion in Fiscal Years 2001-2002. Final scoring of this legislation may deviate from this estimate. The Administration will work with Congress to ensure that no unintended sequesters of spending occur under current law or through enactment of any other proposals that meet the President's objectives to reduce the debt, fund priority initiatives, and grant tax relief to all income tax paying Americans.