Grassley's proposals reflect his ongoing effort to promote initiatives to help family farmersprosper over the long run, in addition to his work this summer to secure an emergency relief packagefor family farmers in Iowa who are struggling to stay in business due to record-low prices.
"The farm crisis we're in today requires an immediate response from both Congress and thepresident. That response should include approval by Congress of a substantial cash payment on topof the existing farm program payments that will be delivered to farmers this year, along with asustained commitment and aggressive action by the administration to open new domestic and foreignmarkets for farm products," Grassley said.
During action tomorrow morning by the Senate's tax-writing committee, Grassley willpresent the following initiatives as amendments to the bill. Each item was introduced earlier thisyear as a free-standing measure.
Farm and Ranch Risk Management AccountsThe first amendment would establishtax-deferred savings accounts to help farmers manage income and price fluctuations. Introduced as S.642, Grassley's proposal would let eligible farmers contribute up to 20percent of their taxable income. Funds could accumulate in the FARRM account for fiveyears and be taxed upon withdrawal.
Biomass Tax CreditThe second amendment Grassley will offer would would foster thedevelopment of biomass as an alternative source of energy. Biomass includes woodchips,agricultural byproducts such as switch grass and untreated construction debris. Introducedas S.1351, Grassley's proposal would expand the tax credit he has secured for wind energyproduction so that it also applied to biomass crops that are grown solely for the purpose ofcombustion. The chairman's tax cut proposal already has incorporated Grassley's legislationto extend for five years the tax credit for wind energy production.
Loans for Beginning FarmersThe third pro-farmer amendment would increase accessto a low-interest lending program for beginning farmers. Introduced as S.1038, thelegislation would remove federal tax-exempt "aggie" bonds from under the private activitybond cap and, in turn, free lending authorities to extend a greater number of aggie bondloans. Grassley first pushed to establish the aggie bonds loan program in 1981. To date, it has loaned more than $262 million to more than 2,603 qualified beginning farmers. Thedefault rate has been only 1.5 percent of the number of loans and 1.75 percent of the dollarvolume. "Helping to maintain independent family farmers will have a positive social andeconomic ripple effect through our small towns and rural areas," Grassley said.
Grassley will offer these amendments to a $792 billion tax cut proposed by FinanceCommittee Chairman Bill Roth of Delaware. Grassley said he also plans to put forward anamendment to help small businesses provide pension coverage to their employees. He is a seniormember of the tax-writing committee.
In May, Grassley introduced a tax cut proposal with Sen. Dianne Feinstein of California. Grassley said their bipartisan plan "put the people's priorities first" by focusing on tax relief itemsthat would help families make ends meet, keep affordable health insurance and plan for long-termcare needs. Above all, the federal tax code should not penalize couples for making a commitmentthrough marriage," Grassley said. The Grassley/Feinstein proposal includes nearly $300 billion intax relief over ten years. It also would accelerate the $30,000 Social Security earnings limit from2002 to 2000.
Last week, Grassley urged President Bill Clinton to fully exercise his authority to bolsterfarm prices. The Iowa senator outlined a plan of action for the president that would increase theprice of corn 25 cents/bushel by doubling the ethanol market for farmers by protecting ethanol'scurrent market in Chicago and Milwaukee and opening the door for ethanol to displace MTBE inCalifornia, where the petroleum product has caused extensive environmental damage. Grassley alsourged the president to regain the market access and protocol commitments China offered in April,when it sought admission to the World Trade Organization. A 1997 study by Iowa State Universitysaid that liberalizing China's pork market would increase income for pork producers by $300 millioneach year.
As chairman of the Senate International Trade Subcommittee, Grassley has been anoutspoken advocate for renewed fast-track negotiating authority for the president. He said that acredible effort the by administration and the president to win passage "is the only way it can beachieved." The United States lost its unchallenged leadership in the world trade community whenfast-track lapsed in 1994.