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House Votes Farm Bill but Veto Seems Certain : Emergency Relief Measure Approved 255-168; Democrats Hold Out Little Hope of Overriding

March 06, 1985|SARA FRITZ and PAUL HOUSTON | Times Staff Writers

WASHINGTON — Led by farm-state Democrats seeking a showdown with President Reagan, the House passed and sent to the White House emergency farm credit legislation that appears destined to be killed by a presidential veto.

The vote of 255 to 168 was taken as hundreds of debt-plagued farmers swarmed to the Capitol, insisting that emergency financial aid is still not enough to help them survive their current difficulties. An estimated 5% of the nation's farmers are expected to go bankrupt this year.

At the White House, spokesman Larry Speakes predicted that Reagan would "act very quickly"--possibly today--to veto the measure, which the President contends is too costly. The bill, originally designed to provide $175 million for famine relief in Africa, carries amendments that would provide $1.85 billion in loan guarantees to U.S. farmers.

Hailed as Victory

Democrats hailed passage of the farm credit bill as a political victory that proves Reagan does not care about the plight of America's farmers. Yet they held out little hope of overriding a presidential veto because both House and Senate votes for the bill fell short of the two-thirds margin necessary to do so.

"Reagan can veto the bill, but he cannot veto the problem," House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) said. "The President seems determined to surprise and disappoint the people who elected him. Maybe he wants the farmers to say 'uncle' before he gives them the help they need."

House Majority Leader Jim Wright (D-Tex.) argued that Congress, which previously has provided emergency financial help for New York City, Chrysler Corp. and the Penn Central rail system, must not deny emergency aid to farmers. He said the Democrats "ask no more for American farmers than what America has willingly done for other segments of our society."

Farm-state Republicans, many of them obviously uncomfortable with the GOP stance on the credit issue, argued against the measure on grounds that it would be pointless to pass it in the face of Reagan's veto threat.

"You're more interested in embarrassing the President of the United States than you are in helping farmers and ranchers," Rep. Edward R. Madigan (R-Ill.) told the Democrats.

Agriculture Secretary John R. Block and other Administration officials have argued that the Democrats' bill is unnecessary because the Agriculture Department already has agreed to guarantee 90% of each farm loan granted this year by banks that will write off at least 10% of the principal or an equivalent amount in interest.

Democrats and Republicans had disagreed on the cost of the farm bail-out. Assuming that the loans are repaid, Democrats estimated that it would cost no more than $429 million over the next five years. But Administration economists estimate that the cost could rise to $2 billion if, as expected, a high percentage of borrowers default on their loans.

In addition to providing $1.85 billion for loan guarantees, the bail-out measure--which the Senate passed last week--includes $100 million to reduce the interest rates of bank loans to farms. And it authorizes the expenditure of about $7 billion by the federal Commodity Credit Corp. to make loans at planting time that usually would be made at harvest.

Won't 'Let You Down'

While lawmakers debated the emergency relief measure, House Agriculture Committee Chairman Kika de la Garza (D-Tex.) assured farmers at a hearing: "We are not going to let you down. If you go down, we all go down with you."

David Gibbs of Kevil, Ky., choking back tears, told the committee that because of export embargoes, high interest rates, low prices and increasing imports, he risks losing a corn and tobacco farm that has been in his family for nearly 100 years.

"I'm ashamed to tell you that I've lost $90,000 a year for the last five years," Gibbs said. "I would get down on my hands and knees and crawl 800 miles back home if it would help some farmers back there. But that's ridiculous. We ask you to please help us."

'A Needed Band-Aid'

The protesting farmers, members of the American Agriculture Movement, said the credit relief legislation passed Tuesday is "a needed Band-Aid." But they agreed with Kansas farmer Gerald Strathman that "what is really needed is radical surgery."

The farmers' organization wants to revise a variety of current farm programs that date back 50 years. It wants mandatory production controls combined with a "parity" policy under which the government guarantees farmers a profit by establishing minimum prices based on annual average production costs.

Several farmers said Block had told them in private Monday that their long-range plan would be no more expensive than the Administration's so-called "market-oriented" proposal to wean farmers from government programs. Block's sole objection, they said, was that farmers should trade in a free market.

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