News Farm Bill Extension Included In Fiscal Cliff Agreement

Farm Bill Extension Included In Fiscal Cliff Agreement

Farm Bill Extension Included In Fiscal Cliff Agreement
January 30, 2013 |

When members of the Alabama Farmers Federation visit Washington, D.C. in mid-March, they’ll be discussing a farm bill many hoped Congress would approve before the annual visit to the nation’s capital.

More than 200 farmers are expected to attend the conference March 12-15, where they will meet with members of Alabama’s congressional delegation to discuss farm policy.

After Congress failed to enact a new five-year farm bill, a last-minute plan to continue the 2008 farm bill was approved Jan. 1 as part of the vote by Congress to avoid the so-called “fiscal cliff.”

The package of bills also included changes to estate tax laws that should help more farm families keep their land. The threshold for exemption of estate taxes was permanently set at $5 million.

“While a last-minute extension of farm policy may have been the only option at this time, it should never have come down to this,” said Mitt Walker, Federation director
of National Legislative Programs. “The full Senate passed a bill, and the House Committee on Agriculture approved its version of a bill, which was never considered by the full House. Both proposed a five-year plan to give farmers some certainty from one crop year to the next. Unfortunately, farmers will have to wait another
year for a long-term farm bill.”

The extension keeps farm program payments to crop farmers the same as this year, and current policies for milk pricing remain in place. A number of programs included in the bill, such as livestock and tree disaster programs, were authorized, but mandatory funding was not.

Walker said changes to estate tax laws are a positive development for farmers. The exemption for estate taxes remains at $5 million, however the tax rate for estates exceeding that amount will increase from 35 percent to 40 percent. Without action, the exemption level would have fallen to $1 million and the tax rate would have increased to 55 percent.

“Even though the tax rate does rise slightly, maintaining the exemption level at $5 million will keep more farmers from facing this terribly unjust tax,” Walker said. “The Alabama Farmers Federation continues to support the total elimination of estate taxes, but this could be viewed as a win in the bill.”

In the agreement, automatic-spending cuts put in place earlier as part of raising the debt ceiling, also known as sequestration, were delayed for two months. The “fiscal cliff” bill maintains tax rates for most Americans, but increases taxes for individuals making more than $400,000 annually or for couples making more than $450,000 a year. Capital gains taxes on that same income bracket will increase from 15 percent to 20 percent. Payroll tax cuts will expire, while unemployment benefits will be extended for nearly 2 million Americans.

The bill passed the Senate with an 89-to-8 vote early New Year’s Day and passed the House in a 257- 167 vote that evening. Sen. Richard Shelby, R-Ala., voted against the measure, and Sen. Jeff Sessions, R-Ala., voted for it. U.S. Rep. Terri Sewell, D-Ala., was the only “yes” vote from Alabama’s delegation in the House. The president signed the bill Jan. 2.

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