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Senators Push Revamped Payment Limit Proposal

posted on March 28, 2008


Hello, I'm Mark Pearson. A snapshot of the beleaguered housing industry released this week revealed the worst slump in more than two decades is far from over.

**According to the Commerce Department, sales of new homes fell nearly 2 percent last month and posted their worst February tally in 14 years. A separate report from the National Association of Realtors indicated **sales of existing homes actually rose about 3 percent in February marking their first increase in seven months. But even with the gain, sales were still down nearly 25 percent from last year. **The median price for single-family homes fell nearly 9 percent from last year and that's the biggest decline in four decades.

The housing industry, of course, is just one sector of a currently fragile U.S. economy teetering on the brink of recession. But that's not the case in rural America, where tight supplies and phenomenal demand have pushed grain prices and farm income to record highs.

The rural renaissance also is yielding increased scrutiny of farm subsidies. And with the federal deficit careening wildly out of control, the powerbrokers crafting the next Farm Bill this week found themselves compromising on government payments to farmers.

Senators Push Revamped Payment Limit Proposal The 2007 farm bill battle will soon drag into the fourth month of 2008 as farm state lawmakers wrangle over key components. Iowa Republican Charles Grassley and North Dakota Democrat Byron Dorgan have retooled their payment cap legislation in hopes of final passage in the farm bill.

The redone measure has been dubbed "Dorgan Grassley 2", and hailed by both lawmakers as a compromise. The bi-partisan team of Senators Grassley and Dorgan, have fought for years on the Senate floor for strict payment limits.

The lawmakers have long pushed a $250,000 cap on U.S. farm payments. During a recent floor vote, the original Dorgan-Grassley measure received 56 votes – four shy of a required 60-vote threshold.

The new "Dorgan-Grassley 2" bill consists of a new four-point plan to appease House Agriculture Chairman Collin Peterson, Southern lawmakers and the Bush Administration:

- First, the bill would only lower payment and income limits when prices rise above a target level.

- Second, in an effort to appease Southern lawmakers, the bill would weaken the brunt of reduced limits on cotton, rice, and peanuts.

- The third and fourth points include a concession to the Bush Administration and reduced payments to high income landowners, as well as cost-saving measures proposed by the Government Accountability Office.

The GAO has previously estimated a potential cost savings of more than $1.1 billion over 10 years. But it is still unclear whether the measure can reach 60 votes on the Senate floor and survive future conference committee hearing with the U.S. House of Representatives.


Tags: agriculture Congress government housing industry money news