Farm, Nutrition, and Bioenergy Act of 2007--Continued --
Floor Speech
FARM, NUTRITION, AND BIOENERGY ACT OF 2007--Continued -- (Senate - December 13, 2007)
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Ms. KLOBUCHAR. Madam President, I am here to address my amendment, No. 3810, and I want to talk about the importance of reform to this farm bill.
I was disappointed today when the amendment of Senator Dorgan and Senator Grassley was defeated. It was a very important amendment. In other years, we actually had enough votes for this amendment, before I was here, but we weren't able to muster the votes necessary to block the filibuster. Well, we have one more opportunity, and that opportunity is this afternoon.
America's farm safety net was created during the Great Depression as an essential reform to help support rural communities and protect struggling family farms from the financial shocks of volatile weather and volatile prices. I believe after 75 years, the reasons for that safety net still exist, and I believe the farm bill that came through our committee has some very good things in it. It is forward thinking; it is about cellulosic ethanol. It is about finally having some permanent disaster relief. It is about a strong safety net for America's farmers. But there is one thing missing from this farm bill, Madam President, and that is the kind of reform that we need to move forward.
I want to demonstrate what we are talking about here with our amendment, which is cosponsored with Senator Durbin and Senator Brown, and why I think it is so important to this bill. As you know, I come from a farm State. It is sixth in the country for agriculture. I am proud of the work our State does and our farmers, and we have diverse farming. I know some of the farmers in my State may not like this, but the vast majority of them support this reform because they know if we don't reform ourselves, someone else will do it for us.
What I am talking about is farm subsidies going to people who shouldn't have them, such as Maurice Wilder, who is a guy that is very wealthy, and who was the No. 1 recipient of commodity payments from 2003 to 2005. He has collected more than $3.2 million in farm payments for properties in five States, even though his net worth is more than $500 million. We also have $3.1 million in farm payments going to residents of the District of Columbia, $4.2 million going to people in Manhattan, and $1 million of taxpayer money going to Beverly Hills 90210.
Now, what can we do to change this? The first thing we are doing is we are getting rid of the three-entity rule, which cuts down on abuse and allows these payments to go to the people they should go to, and ending the practice of dividing farms into multiple corporations so that they get multiple payments.
The second thing we could have done--and sadly we defeated it today--was the Dorgan-Grassley amendment, which would have put a limit on the actual payment at $250,000. That is a lot of money where I come from.
But there is a third thing that we still have the opportunity to do today. I ask my colleagues, those who are fiscal conservatives and who really care about fairness in this country, to look at this amendment and think about what we are doing. Right now, under existing law, no matter how much you net in income--and I am here talking about deducting expenses because expenses don't count. So when my colleagues talk about farms that might have higher expenses, those are out of it. This is just adjusted gross income.
So for full-time farmers who have unlimited incomes, they can be making millions and millions and millions of dollars. They still qualify for subsidies. And because we weren't able to get it passed and put a limit on subsidies, they do not have that $250,000 cap. Part-time farmers right now, under existing law, can make $2.5 million, and they get subsidies and marketing loans, since we were unable to pass this limitation today.
The President's number, which came with the administration's suggested agriculture proposal, was a $200,000 limit--a $200,000 limit for both full and part time. The Agriculture Committee in the House is chaired by Collin Peterson of Minnesota, and I wouldn't call him a radical guy. He has been a friend of farmers forever. He put the limit at $1 million for full-time and $500,000 for part-time farmers. And he has recently been saying publicly that he thinks it should go lower than that, especially since we do not have the total limit on subsidies that was contained in the Dorgan-Grassley amendment.
Now, what does the Senate bill do--the bill that came out of our committee? It has not changed for full-time farmers. No reform for full-time farmers. For part-time farmers, very slowly, it gets to a $750,000 limitation in income--for part-time farmers.
This amendment says $750,000 for full-time farmers should be the limit--$750,000 in income on top of expenses. Now, if you have a bad year and you are a big farmer, you are still going to qualify. But if you make over $750,000, that is where there is a cutoff. It is great you are making money--you should put it in the bank--but then you don't qualify for the subsidies. If you are a part-time farmer, under our amendment you can make $250,000 or under, and then you will qualify for the subsidies. And here is where we are talking about these investors, the people who aren't full-time farmers, people making less than 66 percent of their income from farming.
Now, what does this amendment do? Let's consider what it means. If you live in a city, and you have a job as an investment banker and make $2 million a year, you don't get the government checks. Right now you can, but under our amendment you won't be able to. And if you are a full-time farmer, meaning more than 75 percent of your income comes from farming, under current law there is absolutely no limit on your income, and you will still get those government checks. This puts some reasonable limits on the income when you qualify for the government farm subsidy checks. That is what it does.
I have to tell you this: With the kind of budget battles we have ahead of us, we have to look at what we are doing and we have to be thinking: Is this fair? When we have a limited amount of money, Madam President, and we are going to have to deal with Social Security and Medicare and all these issues, if we can't even say, for farmers making over $750,000, we are not going to put some limit on these government checks, I really don't understand how we are going to grapple with these tougher issues. It is a matter of fairness because I believe this money should be going to family farmers.
That is what this system was set up to do. It should be going to the hard-working farmers in this country, not to art collectors in San Francisco and not to real estate developers in Florida. That is all we are trying to do with this amendment. So I would appeal to my friends on both sides of the aisle and suggest that this is our opportunity to act. We have the chair of the House Agriculture Committee already putting in their bill some limits and indicating they may want to go lower. We have an opportunity to be part of that change.
I am going to give the other side some opportunity to speak and save the rest of my time, but I will end with a little holiday story. I thought we needed a little holiday cheer today, on a very difficult day.
My daughter and I, when she was 9 years old, went to see the movie ``Polar Express.'' We watched this fanciful movie, and after we came out, she said to me: Mom, you know, there was one thing in that movie that wasn't true.
And I looked at her and thought, what could it be? Could it be when this big body of water froze over so the train could go over it? Was it when a million elves suddenly appeared at the North Pole? Was that the one thing that wasn't true?
She said: You know, Mom, at the end, when the conductor--who was played by Tom Hanks--says to the little boy: Come on, kid, get on the train. It doesn't matter what direction the train is going, just get on the train. And she looked at me and she said: Mom, it does matter what direction the train is going.
Well, that is what I would say to my colleagues today. It matters what direction the train is going. Are we going to be putting money into the hard-working family farmers in this country or are we going to spend it on real estate developers in Florida who have $5 million to their name or art collectors in San Francisco?
Are we willing to say, change is afoot, and then be agents of change. People in this country want to see change. We heard that in this last election. This is our opportunity; it is our chance to go in the direction of reform. We have done that with so many different parts of this farm bill, and that is why I supported this farm bill in committee, but this is our chance to go in the direction of change. It is a very small incremental step, but it will start us going in the right direction with this farm bill--a direction of reform.
Madam President, I yield the floor, and I ask how much time I have remaining.
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Ms. KLOBUCHAR. Madam President, the average farmer in my State makes $54,000 a year. I think you see family farmers like that all across this country. That is what this amendment is about. There has been debate about Scottie Pippen and all these people. The USDA has looked at this, the Government has looked at this, and this would save about $355 million. Where is that $355 million coming from? It is coming from full-time farmers who are grossing $750,000 or more, into the millions a year, and part-time farm investors who are making over $250,000 a year. That is where this is coming from.
There has been discussion, which I think is smoke and mirrors, about expenses. Let me make clear, farmers can deduct their operating expenses such as seed, fertilizer, fuel, and labor from their adjusted gross income. When it comes to investment in buildings and equipment, these are capital expenses, and they depreciate over time. That depreciation is deductible. When it comes to land, it works like it does a home mortgage. Your interest is deductible, but your land is something you have that you get value from. When it comes to rented land, the rental cost of the land is fully deductible from adjusted gross income.
I didn't come up with these laws. They are in the Tax Code. They are the law. What this is about is making sure we have some real reform. Because if we don't do it in the farm States, it is going to happen to us. I have said this before, and I truly believe it will happen.
There has been some discussion about what our existing bill does. Let me explain again. The House-passed bill sets it at $1 million for full time, $500,000 for part time. My colleagues have been saying: We have a 70-percent reduction for a part-time farmer. That goes to say, if you start high enough at $2.5 million, anything like 70 percent sounds good. But instead, in fact, the actual Senate bill is only at $750,000 for a part-time farmer.
I have visited hard-working farmers all over my State, visited all 87 counties 2 years in a row. I have talked to them and to farm groups across the country. Do they like this? Well, not totally. They get concerned. What does that mean? I think many of them understand--and I know Senator Grassley knows this in Iowa and Senator Dorgan understands this in North Dakota--that at some point the Government has a limited amount of money. We have to make some decisions. What I am saying is, let's make a decision to help the hard-working farmers of this country to move in that new direction, to cellulosic ethanol and energy independence and good conservation and making sure we have a strong safety net that this farm program deserves. Let's go in that direction to the future and not stay here where we increasingly, as our economy has changed, are giving a larger amount of money to the wealthiest investors. Beverly Hills 90210, $1 million in payments.
I believe in this safety net. I support this farm bill. I will support this farm bill, because I believe in a safety net. But I believe it is time to move to some reform. The people of this country are ready for this reform. The people in our rural communities are ready for this reform. Now, my friends, we have a chance to do it.
I thank the Chair.
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