WASHINGTON – The House of Representatives on the evening of Jan. 1 by a vote of 256 to 171 passed the American Taxpayer Relief Act of 2012, which, in addition to preserving tax reductions for all but the wealthiest Americans enacted during the administration of President George W. Bush and postponing decisions on required spending cuts for two months to allow further time to reach an agreement, extended the current farm act through Sept. 30, 2013. The Senate, where the compromise bill originated, passed the measure in the early hours of the New Year’s Day. President Barack Obama was expected to sign the bill as soon as it reaches his desk.
The lame duck session of Congress was dominated by the drama and ultimately the scramble to avoid the so-called “fiscal cliff.” Vice-President Joe Biden and Senate Minority Leader Mitch McConnell, who crafted the compromise tax bill, ignored efforts of leaders of the congressional agriculture committees to insert their own language into the section extending the Food, Conservation and Energy Act of 2008. Among other things, the committees sought language contained in both House and Senate farm bills and supported by milk producers that would have included producer friendly changes in the dairy program.
The extension as passed would extend current farm programs, including the milk program in its current form, through the end of the 2013 fiscal year, leaving the next Congress the responsibility of passing a successor to the 2008 farm act.
Lacking an extension and with time running out on the current Congress for any separate legislative action, the 1949 farm act would have become the law governing U.S. farm programs. Under the 1949 law, the U.S. Department of Agriculture would have been required to being buying dairy products at a rate of $38.54 per cwt, which is more than double the current price. The threat of a spike in consumer prices of milk and dairy products was a primary motivating factor in including a farm act extension in the compromise tax legislation.