Bush spoke at the Agriculture Department, at the swearing-in ceremony for former North Dakota Gov. Ed Schafer, who is taking charge at the agency in the midst of contentious negotiations on a five-year, $286 billion bill passed by both the House and Senate. In veto threats issued last year, administration officials argued the bill lacks reform, spends too much money and raises taxes.
"Ed is going to work with members of both parties on a bill that spends the people's money wisely, doesn't raise taxes, reforms and tightens subsidy payments - a farm bill that will benefit the entire economy," Bush said, restating those concerns.
"I'm confident we can come together to get a good farm bill, but if Congress sends me legislation that raises taxes or does not make needed reforms, I'm going to veto it."
Bush nominated Schafer in October to replace former Nebraska Gov. Mike Johanns, who left the agriculture post to run for the Senate. Former Deputy Secretary Charles Conner has served as acting secretary and has been negotiating with Iowa Sen. Tom Harkin, the Democratic chairman of the committee, and House Agriculture Committee Chairman Collin Peterson, D-Minn., on the bill.
At issue are tax provisions added to both versions of the bill that are intended to raise additional money for farm programs. The administration says the bills use funding gimmicks and tax increases to supplement a farm economy that is already strong.
The White House also says neither bill does enough to limit payments to wealthy farmers, arguing that Congress should adapt an administration proposal that would ban subsidies to farmers whose gross income exceeds an average of $200,000 a year.
North Dakota Sen. Kent Conrad, chairman of the Senate Budget Committee and a senior member of the agriculture panel, says a group of senators is working on a new tax package intended to address some of the administration's concerns.
Harkin urged Bush on Wednesday to back away from his threat.
"For President Bush to continue to take a hard line and threaten to veto a farm bill is unproductive and against the bipartisan spirit that made this bill a reality and that carried it through the Senate with one of the largest votes in the history of farm bills," Harkin said.
The Senate passed the farm bill in December on a 79-14 vote. The House passed its version in July.
Both Harkin and Peterson have suggested that if the negotiations come to a stalemate, Congress might bypass an extension of current law - the 2002 law expires March 15 - and allow farm policy to revert to permanent statutes last updated in 1949. That could cause major problems for the dairy and soybean industries, among others, and would eliminate newer programs designed to protect environmentally sensitive land and extra dollars for the fruit and vegetable industries.
"I don't think it's that unreasonable," Peterson said last month. "I told (Conner) if they are inflexible and it causes us not to get this done, then they should get ready to implement this. That's my position."