Monday, August 08, 2022

What's in the tax and climate-spending bill for agriculture

The bill that Democrats titled the Inflation Reduction Act, and that Republicans said was misnamed, got some eleventh-hour additions for farmers, Politico's Weekly Agriculture reports. The bill is expected to pass the House and be signed by President Biden this week.

The Department of Agriculture would get $3.1 billion to forgive “distressed” debtors, $2.2 billion to administer aid to farmers who have experienced USDA discrimination before Jan. 1, 2021, and the Forest Service would get $5 billion to fight wildfires and boost carbon sequestration via forestry. The Bureau of Reclamation in the Interior Department would get $4 billion for drought resilience.

"The bill would dump $20 billion into various existing oversubscribed USDA agriculture programs to reduce environmental impact," Garrett Downs reports. That includes $8.45 billion for the Environmental Quality Incentives Program, $6.75 billion for the Regional Conservation Partnership Program, $3.25 billion for the Conservation Stewardship Program and $1.4 billion for the Agricultural Conservation Easement Program.

USDA Rural Development will get $14 billion for clean energy and economic growth, including $9.7 billion in grants and loans for renewable energy projects by rural electric cooperatives, $1 billion for forgivable loans for electric generation from renewable sources for resale, and $500 million for biofuels infrastructure. The electric co-ops would also get direct-pay credits for investing in renewables, which would bring them "into parity with for-profit counterparts that have reaped renewable energy tax credits for years," Downs notes.

Republican Sen. John Boozman of Arkansas said the bill "sets a particularly bad precedent for Farm Bill programs. If they go down this road, we very well might be looking at reconciliation as the only way future farm bills get written."

But Jim Mulhern, CEO of the National Milk Producers Federation, told Politico that the bill is a “game-changer” and “will better position dairy farmers to effectively implement the dairy sector’s Net Zero Initiative and fulfill its 2050 environmental stewardship goals.”

Several other farm lobbies also praised the biofuels provisions, but the American Farm Bureau Federation opposes the bill. President Zippy Duvall said it “has serious concerns about the proposed increase in taxes on American businesses at a time when the country is entering a recession.” The bill would set a new 15% corporate minimum tax, and levy a 1% excise tax on stock buybacks. "Democrats scaled back the corporate minimum tax to shield individual companies operating under the umbrella of a single owner," The Wall Street Journal reports. "They had also previously altered it to allow companies to continue to accelerate depreciation for tax purposes."

President Biden said the bill keeps his promise not to raise taxes on households earning less than $400,000 a year. Andrew Duehren and Siobhan Hughes of the Journal note, "The proposed taxes wouldn’t raise taxes directly on middle-class households, but higher business taxes can add costs elsewhere that affect individuals."

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