Wilson-Miller Dispute Threatens Federal Water Bill : Congress: California lawmakers battle over water subsidy provision in $1.5-billion measure.

A $1.5-billion federal water bill that contains benefits for California appeared in danger of going down the congressional drain late Saturday because of an 11th-hour dispute between Sen. Pete Wilson (R-Calif.) and Rep. George Miller (D-Martinez).

With Congress poised to adjourn for the year, and with both lawmakers sticking firmly to their positions in the dispute over water subsidies, it appeared likely that the legislation would be killed through congressional inaction.

Some lawmakers were still trying to work out a compromise as adjournment approached. But others, sensing that the bill might not pass, were moving to attach their pet water projects to a plethora of unrelated bills sailing toward the legislative finish line of the 101st Congress.

The dispute concerns a provision in the water bill that would prevent large farms from using legal loopholes to receive federal water subsidies meant for smaller ones. The issue is a bitterly divisive one for California, pitting environmentalists against agricultural interests and dividing the state’s congressional delegation almost down the middle.

In the end, it also pitted Miller, who authored the provision, in a bitter battle against Wilson, who opposed it. Each lawmaker angrily accused the other of sinking the water bill by playing politics with the fate of the state’s farmers and by refusing to negotiate in good faith.

“Wilson has decided to sacrifice water conservation in a drought-stricken state and to sacrifice the taxpayer in order to protect the rich,” Miller charged.

“Miller is trying to pass this provision by extortion. He is coupling a number of legitimately needed projects throughout the Western states with these unfair proposals that he calls reform, but which are scaring the daylights out of small farmers in California. It’s a brazen power play,” Wilson retorted.

At issue was a provision that would amend the 1982 Reclamation Reform Act, which subsidizes water supplies to farms of less than 960 acres in the water-scarce West. The original law was meant to encourage agriculture by giving a break to small-scale farmers who might not otherwise be able to afford irrigated water. But, according to a General Accounting Office study, large corporate agribusinesses have also been able to receive the subsidies through a loophole that lets them divide their holdings into separate 960-acre partnerships, corporations or trust arrangements.

A water projects bill sponsored by Miller and passed by the House in June sought to close that loophole, which environmentalists say undermines water conservation efforts and cheats taxpayers. In the Central Valley project area, the subsidies cost taxpayers $135 million annually.

Miller said his provision would end the abuses that have allowed large farms to receive the “multi-million-dollar water subsidies intended only for family farmers.”

Rushing to finish before adjournment, House and Senate negotiators sought to incorporate language from the House bill into the version now before the Senate. That would have circumvented the need to convene a conference committee to reconcile differences between the bills and guaranteed congressional approval before the clock ticks off the current session.

But exercising a right that senators have to put a hold on legislation they dislike, Wilson blocked the bill from coming to the Senate floor to pressure its sponsors into withdrawing the subsidy reform provision.

Wilson said he agreed that large farms were abusing the law and that the loopholes needed to be closed. But he contended that Miller’s amendment would also hurt smaller farmers who band together to work their property jointly and achieve greater efficiency.

“Farmers who were entitled to the subsidies under the 1987 law should not be denied them because they choose to achieve greater efficiency by operating their farms jointly with other members of their families or with neighbors,” Wilson said.

Wilson’s aides acknowledge that the senator “put a hold” on the bill earlier in the week, forcing its Senate sponsors to remove the offending provision so the legislation could be passed and sent to the House for approval before adjournment Saturday night. But they charged that it was now Miller who was blocking the bill because he was insisting on reattaching the reform provision and bouncing it back to the Senate for another vote.

“There also seems to be a political element in this,” a Wilson aide said. With the GOP senator in a tight gubernatorial race against Democrat Dianne Feinstein, “we cannot but suspect that Miller is trying to make life difficult for Pete right now,” the aide said.

As Congress edged toward adjournment, this legislative Ping-Pong turned into a game of congressional chicken, with the bill’s prospects hinging on one side or the other giving way.

If no compromise is reached, then a grab bag of local water and energy projects affecting mostly Western states, including California, would also go down with the bill.

Among them are federal water programs that would partially finance a municipal waste water re-use and treatment project for the Hyperion Plant in Los Angeles. Responding to pressures on the city to reduce discharges from the plant, the legislation would provide federal money for a study to deal with the problem.

Another project in the bill would direct Interior Department Secretary Manuel Lujan Jr. to supervise the operation of the Glen Canyon Dam upstream of the Grand Canyon. Department studies have shown that current operating procedures at the dam have damaged the federal park, environmentalists said.