Fine print in Iraq bill benefits Midwest dairy farmers

(AP) - In Washington, it pays to read the fine print. The Iraq funding bill is a perfect example, studded with provisions to help dairy farmers, airlines, salmon fisherman and rural counties hurt by cutbacks in federal logging.

And that's just scratching the surface.

Take dairy farmers, for example. They're receiving $1.2 billion in help in the Iraq bill as lawmakers clear the way to renew a subsidy program aimed at smaller milk producers.

Then there are airlines like Continental and American, who won a last-minute battle with the White House over a plan that would allow them to together reduce the contributions to their pension plans by almost $2 billion over the next decade.

The language extending the Milk Income Loss Contract, or MILC program, is just one of the provisions hitching a ride on the Iraq measure that couldn't advance on their own.

Taken together, they generated lots of enthusiasm among House lawmakers, who approved them by a 348-73 vote. The Senate cleared the war funding bill, 80-14.

Powerful Democrats such as House Appropriations Committee Chairman David Obey, D-Wis., used the war funding bill to shield renewing the MILC program from opponents in western states.

The program makes payments to farmers when milk prices drop. It favors those from states where dairy herds tend to be smaller -- such as Wisconsin, Minnesota, New York and Pennsylvania -- since it pays farmers only on the amount of milk produced by about 120 cows in a year.

Western states with their generally larger herds benefit far less, so MILC has many opponents, too, such as Sen. Pete Domenici, R-N.M.

The 12-line MILC provision has its roots in a battle from two years ago over extending the program, which expired briefly in 2005.

The MILC program makes payments to farmers when milk prices drop. It favors states with smaller dairy herds, including Wisconsin and Minnesota, so Western states with larger dairy farms oppose the program.

Then, opponents such as Agriculture Committee Chairman Bob Goodlatte, R-Va., grudgingly agreed to renew the program as part of a broader deficit-reduction bill, but only after making sure it wouldn't be factored into budget estimates allotting funds to rewrite the farm bill this year.

Goodlatte's move put the MILC program at a disadvantage since it required lawmakers to cut other popular farm programs in order to extend milk subsidies this year.

The war funding bill fixes all that by adding $1.2 billion over five years - violating the spirit of new pay-as-you-go rules requiring increases to farm programs to be "paid for" by cuts elsewhere - to the pot of money available for this year's rewrite of farm programs.

What is more, under arcane budget rules, that money is made available only for the MILC program.

"It makes my job a lot easier," said House Agriculture Committee Chairman Collin Peterson, D-Minn.

The MILC provision is exactly the type of "excessive and extraneous" provision opposed by the White House in earlier veto threats. But President Bush is a fan of the program - or was in 2004 when he endorsed it at a campaign event in the swing state of Wisconsin, which gets the biggest share of MILC payments.

The White House took a firmer - but losing - stand against provisions aimed at helping American and Continental, looking for flexibility in their pension plan contributions.

But American and Continental were backed by Senate powerhouses such as Majority Leader Harry Reid, D-Nev., and No. 2 Democrat Dick Durbin of Illinois, the two airlines were seeking relief comparable to that awarded Northwest and Delta last year.

The White House protested, administration officials said, claiming the provision favoring American ran counter to an agreement to keep wholly new material out of the bill. The provision matched relief provided to Continental in an earlier, vetoed version of the bill.

The two companies, along with a few smaller airlines such as Alaska Air, will be given leeway to reduce contributions to their defined benefit pension plans by a combined total of $2 billion, according to the Pension Benefit Guaranty Corp.

The 250-plus page measure provided an engine to pull many other provisions into law, including $60 million in help for salmon fishermen, tribes and processors in California and Oregon that have been harmed by lowered Klamath River flows that have wrecked salmon runs.

Also in the Northwest, rural counties harmed by reduced revenues from timber harvested on federal lands, won a one-year, $425 million extension of a federal payment program.

The Wisconsin delegation, its power magnified by last year's elections, orchestrated inclusion of a two-and-a-half year extension of that state's popular SeniorCare prescription drug program.

(Copyright 2007 by The Associated Press. All Rights Reserved.)

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