Bush backs off plan to cut farm payments

WASHINGTON -- The Bush administration on Tuesday threw in the towel on the president's proposal to slash farm payments in the face of opposition from lawmakers in both parties.

Agriculture Secretary Mike Johanns told key senators he was willing to look at other ideas for spending cuts to hold down the federal deficit.

"We acknowledge that many of these policy proposals, such as the reduction in the payment limit, are quite sensitive," Johanns told a Senate Appropriations Committee panel on farm spending. "We recognize Congress may have other proposals to achieve these savings, and we are willing to work with the Congress on other cost-saving measures."

The president in February proposed cutting billions of dollars from payments to large farm operations by lowering the maximum subsidies farmers can collect, from $360,000 to $250,000, and by closing loopholes enabling some growers to collect millions of dollars more than the limits.

Bush also asked Congress to cut all farm payments by 5 percent.

The cuts would hurt cotton and rice growers in the South and California much more than wheat, soybean and corn growers in the Farm Belt, although farm groups uniformly oppose any cuts.

Many farm-state lawmakers were relieved by Johanns' comments.

"Perhaps the administration has finally begun to hear the roar from the heartland," said Sen. Blanche Lincoln, D-Ark. "I have no doubt that Southern farmers are willing to sacrifice in order to reduce our deficit and to help pay for the war on terrorism, but they've been asked to bear a disproportionate share of that burden."

Sen. Conrad Burns, R-Mont., said that if administration officials are willing to change their minds, "you better believe I'm going to take them up on it."

"I'll continue working with the administration and my colleagues in the Senate until we've found a reasonable compromise between a responsible budget and the needs of our farmers and ranchers," Burns said.

Johanns has argued that bigger operations collect too big a share of government payments. According to his department, 8 percent of producers receive 78 percent of subsidies.

The administration still supports the payment limit plan, Agriculture Department spokesman Ed Loyd said.

"We are signaling a willingness to work with Congress to achieve these savings," Loyd said.

The cuts Bush proposed in February would total $8 billion, as calculated by the nonpartisan Congressional Budget Office. Last month, House budget writers cut Agriculture Department spending for 2006 by $5.3 billion, while their Senate counterparts cut it by $2.8 billion.

If cuts don't come from payments to farmers, they still must come from somewhere. Republican committee chairmen have suggested reductions in spending on land conservation and nutrition programs, such as food stamps, also run by the Agriculture Department.

"The goal is deficit reduction. We have to keep our eye on the ball," Johanns told reporters after the Senate committee hearing. "The president's got good proposals out there. There may be some other ideas. We'll look at those ideas. We'll try to factor those in."

Advocates of payment limits said it's possible the administration could still manage to improve subsidy programs.

"Payment limits is but one of the many tools Congress and the administration can use to reform our subsidy programs," said Scott Faber, spokesman for Environmental Defense, one of several groups advocating payment limits. "There are many ways you could reform subsidy programs to cost less and help more farmers."