House Rejects Ban on Crop Payments to Big Farmers : Legislation: Big-city interests fail to impose income caps but the Senate kills a bid to tie subsidies to consumer price rises.

The House farm bloc, riding roughshod over big-city critics, Wednesday crushed two attempts to bar crop payments to farmers with net incomes above $100,000 or to giant farms with annual sales of at least $1 million.

The defeat of subsidy limits came after the Senate had killed by a 58-40 vote a proposal to scrap the controversial peanut quota and price support system--a system termed “archaic” by the Bush Administration.

The developments came as both chambers pushed toward approval of similar five-year, $55-billion dollar farm bills under threat of a presidential veto. Late Wednesday night the Senate continued to debate minor amendments and was expected to approve the bill in the early morning hours today. House leaders predicted final action by today as well.

On the Senate side, a move to raise farm subsidies by indexing them to the consumer price index was rejected overwhelmingly, 72 to 26. Meanwhile, the House narrowly approved a proposal to give the Administration wider discretion to lower wheat and feed grain price supports to keep U.S. grain competitive in world markets.

In another controversial area, the House reached a compromise to lower ceilings on annual wool and mohair subsidies to $200,000 for each recipient for the next three years, and $100,000 afterward. Currently there is no cap.

Both farm bills would increase federal food stamp benefits for an estimated 20 million Americans, basically freeze crop subsidies at present levels, and add new price supports for soybeans.

Administration officials have warned that they will recommend to President Bush that he veto the legislation if Congress passes it in the form approved by the Agriculture committees of the two chambers. The Administration wants Congress to trim the overall cost of the bill and is seeking more market-oriented provisions.

Efforts of a bipartisan alliance to deny government payments for basic crops to the most affluent farmers ran into overwhelming opposition from the farm bloc.

In opposing a cutoff of subsidies to the wealthiest 2% of farmers, Rep. E. (Kika) de la Garza (D-Tex.), chairman of the House farm panel, said: “We have a good system and it’s working.”

Referring to himself, he shouted: “Can you imagine a shoeshine boy from South Texas being accused of protecting the rich? Ridiculous!”

A loose-knit coalition led by Rep. Charles E. Schumer (D-N.Y.), who represents Brooklyn, and Rep. Dick Armey (R-Tex.), a former economics professor from the Dallas suburbs, tried to cut off farm subsidies to persons with adjusted gross incomes above $100,000. They lost, 263 to 159.

Schumer said that the most well-off 20,000 of the 800,000 farmers who get government crop payments would be affected by their proposal to limit subsidies. Armey, who said that this group got only 4% of its income from farming, estimated that the change would save about $3.5 billion in the next five years.

“The well-to-do can get by without subsidies,” Schumer said. “They are milking the government.”

Rep. Major Owens, another New York City Democrat, told farm bloc leaders: “Excesses must be trimmed. Get rid of the parasites.”

Defenders of the existing system, however, said that a ban on payments to wealthier farmers would destroy the farm program by encouraging them to plant more crops, driving down the market price for basic crops and hurting the average family farmer.

“People come to the floor who don’t know very much about agriculture,” complained Rep. Byron L. Dorgan (D-N.D.). “There are no million-dollar enterprises in North Dakota. In most cases, we have family farmers hanging on by their fingernails.”

Rep. Robert Smith (R-Ore.) said that House members earn almost $100,000 a year and told his colleagues: “You’re not rich!” as he urged them to reject the cutoff of payments urged by Schumer and Armey.

But Rep. George Miller (D-Martinez) said that the spirited three-hour debate demonstrated that limits on farm subsidies eventually would be approved because of the federal government’s limited resources.

Earlier, the House rejected by a vote of 251 to 174 an attempt by Rep. Dan Glickman (D-Kan.) to ban direct subsidies to large farms with annual sales of $1 million or more.

Glickman urged taking out of the program “the mega-operator . . . who has tens of thousands of acres.”