House, Senate OK Drought Aid Bills : Nearly $6 Billion in Help for Farmers Backed; Reagan’s Support Expected

With strong bipartisan support, the House and Senate on Thursday overwhelmingly approved separate bills providing nearly $6 billion in aid to farmers hard-hit by the worst drought since the Great Depression of the 1930s.

House members approved their bill 368 to 29, while the Senate approved its version 94 to 0.

The sweeping legislation, which would compensate farmers for part of the devastating crop losses they have suffered in recent months, now goes to a House-Senate conference committee, where members will attempt to iron out differences in the two bills.

Although President Reagan has expressed strong concerns about costly, “special interest” provisions in the drought legislation, he has urged speedy passage of a bill and is expected to sign one into law.

‘Need Is Obvious’

“The need for this measure is obvious,” said Sen. Richard G. Lugar (R-Ind.), the ranking Republican on the Senate Agriculture Committee. “Our heartland has been devastated by one of the worst droughts in our history. Now, we are trying to alleviate the worst of its impacts.”

The legislation would be financed in part by using federal price-support funds that have gone unspent while the drought persisted and the price of many crops has increased.

“We are sending a strong message to the farmers of this country today,” said Rep. E. (Kika) de la Garza (D-Tex.), chairman of the House Agriculture Committee. “The message is: Hold on, help is on the way, you will survive.”

However, Reagan Administration officials put a damper on Thursday’s debate by releasing discouraging news about the nation’s budget deficit. They indicated that Congress may have only $5.9 billion to spend this year on “big ticket” items--including the drought bill, welfare reform, anti-drug legislation and other proposals--before inflating the deficit even more and triggering automatic, across-the-board spending cuts in many programs.

Sen. Pete V. Domenici (R-N.M.), the ranking Republican on the Senate Budget Committee, said the drought relief, welfare reform and anti-drug bills now pending before Congress might trigger billions in cuts under the Gramm-Rudman deficit reduction law. It was not clear how the conflicting priorities could be accommodated. The cost of both the House and Senate versions of the drought bill was estimated at $5.8 billion to $6 billion.

“We don’t have much wiggle room this year,” added Sen. Bob Dole (R-Kan.). “We can’t load this (drought bill) down with extra spending and stay within our budget limits.”

But some members could not resist the temptation. The House held an angry debate, for example, over an amendment that would significantly increase the level of milk-price supports that the government pays to dairy farmers for surplus production.

Opposition Voiced

Members from non-dairy districts charged that the proposal, authored by Rep. James M. Jeffords (R-Vt.), was a selfish attempt to increase federal subsidies for farmers who were already treated generously by the drought legislation.

But Jeffords and others said their districts have been devastated by the drought and that the production of dairy products nationwide is dangerously low. It is “inconceivable and unfair that the nation would ignore these problems,” said Rep. David R. Obey (D-Wis.).

In an eventual compromise, the House approved a three-month increase in the dairy-price support, amounting to an extra 50 cents per 100 pounds of surplus butter, cheese and nonfat dry milk, but delayed it until next year. The Reagan Administration opposes the provision.

Other amendments were less controversial. In general, both bills would pay farmers 65% of their usual income for losses that exceed 35% of a crop. Under the formulas, farmers with major losses would get about half of their usual income.

A key difference in the Senate bill, however, is that farmers who are especially hard-hit by the drought could receive additional compensation. They could receive 85% of their normal revenues on losses exceeding 75% of their crops.

Both bills limit the disaster payments for any one person to $100,000. In addition, Rep. Charles E. Schumer (D-N.Y.) won passage of an amendment in the House version barring disaster payments to any farmers whose gross annual revenues exceed $2 million.

Excessive Profits Feared

In the Senate, Dole expressed similar concern that there might be “horror stories” about farmers who might make excessive profits under the drought legislation. He won approval of an amendment that would prevent any farmers from increasing their annual earnings as a result of the drought relief program.

“We don’t want to hear about any farmers’ taking long vacations to Florida because of this bill,” he said. “I’ve heard that sentiment expressed by farmers, too. They don’t want this bill to give rural America or farmers a bad name.”

Other members, sensitive to the bill’s huge price tag, expressed similar caution. De la Garza said the drought relief legislation is only a one-time expenditure, and added that “this is not a farmer bail-out bill. The people in rural America don’t want a handout; they just want a helping hand.”

Crop Destruction

Despite the budget deficit warnings by Administration officials, some members feared that the legislation might not be nearly enough to bolster farmers, many of whom have seen virtually all of their crops destroyed this year.

“The truth is, none of us really knows the full ramifications of this drought . . . it’s getting worse in some places even as we speak here today,” said Rep. Dan Glickman (D-Kan.). “So it’s equally hard for us to come to grips with budget limitations, since nobody understands how bad this situation might really be.”

But those limitations are real, said Rep. Leon E. Panetta (D-Monterey), adding that farmers would now have to adjust to some “harsh” new realities, including the purchase of costly crop insurance to protect them in future years against similar losses.

“With this bill, we are saying to farmers that we’re coming to the end of drought relief assistance in Congress,” he said. “We’re saying that farmers are going to have take some steps to protect themselves.”