WASHINGTON – House Appropriations Committee Chair Nita Lowey, D-N.Y., is proposing to block the White House from fully funding its farm bailout program, according to a draft of legislation reviewed by the Washington Post, potentially imperiling President Donald Trump’s ability to direct payments to thousands of farmers.

The bailout program was created last year amid complaints from agriculture groups that China had stopped purchasing their crops in retaliation for new tariffs that the White House imposed on Chinese imports. Trump has ordered that billions of dollars in taxpayer funds be paid directly to farmers as a way to offset their losses.

The bailout hadn’t needed congressional approval up to this point, but that has changed.

The White House has already authorized the Agriculture Department to make $28 billion in payments over two years, but the Depression-era program Trump is using for the program has a $30 billion cap that they are expected to hit this year before the second round of payments can be completed. The White House recently asked permission from Congress to spend even more.

If Congress doesn’t act, then some of the money Trump has promised farmers likely will not be able to be paid.

In new legislation to fund the government later this year, Lowey left the farm bailout money out of her legislation. As head of the appropriations committee, she has broad power to decide what is included in any spending bill. And lawmakers from both parties are under pressure to pass a new spending bill in the next few weeks, or they will risk a government shutdown on October 1.

The White House has requested that lawmakers allow the Department of Agriculture to spend more money as part of Trump’s farm bailout effort, but Lowey’s bill shows how the matter is likely to become a major fight with political implications for both parties.

A number of Democrats are sympathetic to complaints from farmers in key states, particularly in the Upper Midwest, but there are growing signs that agriculture groups are pinning blame squarely on the White House for the continued uncertainty. As part of separate trade deals, Trump is trying to pressure Japan to buy more corn and China to buy more soybeans, and he has promised farmers of both crops that they will benefit from his tactics. He continued to make that argument Thursday morning on Twitter.

The rejection of the White House’s request by a top Democrat sets the stage for a potential clash with Congress over the bailout at a vulnerable moment for U.S. agriculture.

Lowey’s move is one of the first signs that Democrats are looking for ways to dig in and force the White House to either make other concessions or revise the bailout program, which some critics say disproportionately benefits wealthy farmers.

Her proposal to fund the government, intended for circulation among lawmakers, is the party’s initial offer in its plan to fund the government until Nov. 21. The “continuing resolution” proposal aims to maintain the status quo while averting a looming government shutdown, which is why it sidesteps controversial requests from the administration, such as the farm bailout request.

The White House has relied on billions in direct payments to farmers to help them survive the trade war with China, as China has responded to U.S. tariffs with retaliatory actions that have devastated American agriculture.

The negotiations over the farm bailout represent fraught and complicated political terrain for both sides of the political aisle. The Trump administration could face an outcry if the payments do not go out, but Democrats may prove unlikely to risk being blamed for standing in the way of aid to farm country.

The Trump administration is using the New Deal-era Commodity Credit Corporation as its basis for paying out the “trade mitigation” funds without Congressional approval. The Department of Agriculture can pay up to $30 billion annually out of that fund, which includes spending unrelated to the bailout.

But the administration will hit that $30 billion limit sometime this fall. As a result, earlier this month the Trump administration sent a letter to Congress asking for changes that would in effect increase how much the it can distribute through the Commodity Credit Corporation.

If Congress does not provide the additional funding in time, the administration warned in its letter to lawmakers, CCC “would have to stop making payments . . . posing a serious risk for the farmers and ranchers supported by these programs.”

Lowey’s initial proposal to fund the government does not meet either that demand, or other requests from the White House over farm subsidies. Democrats are aiming for the “narrowest” possible bill that would be able to pass Congress and avert the government shutdown, according to an aide with knowledge of the document not authorized to speak publicly, avoiding the farm bailout and other charged requests from the administration.

Trump has promised funding to farmers in two different tranches. At least two-thirds of the administration’s initial $12 billion in bailout funds for farmers were paid out last year, while the administration said earlier this year it will spend an additional $16 billion in a second round of bailouts. More than $2 billion of that second bailout has gone out, the Department of Agriculture said earlier this month.

Close to three in 10 farmers feel the bailout payments will “not at all” make up for losses related to the tariff battle in 2019, according to an index calculated by Purdue University released this month. But about 70 percent said the bailout would either “completely or somewhat relieve” their concerns about the tariffs.

It is unclear what could happen next, although the Trump administration has already promised farmers billions in payments this year.

Some advocates have raised concerns over reports showing the bailout is overwhelmingly benefiting wealthy and white farmers. Sen. Debbie Stabenow, D-Mich., the top Democrat on the agriculture committee, has also raised concerns about whether the administration had promised to spend more than it had the authority to spend.

In June, Stabenow said in a hearing that the CCC only had $7.7 billion left before hitting its $30 billion limit, but noted that the administration also already said it would spend an additional $16 billion in bailout assistance.

Stabenow asked if the administration needed Congress’ help with the rest of the bailout, to which USDA Undersecretary Ted McKinney responded: “”There is not an answer now, but we would not presume anything if you all have not authorized that … I don’t think funds have been obligated yet that are not there. So we respect the role of the Congress, absolutely.”

 

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