Clinton Vetoes Tax Cut; Farmer Favorites Included

September 24, 1999

When President Clinton predictably vetoed the Republicans' tax cut bill, he also scuttled several provisions favored by farmers. Estate tax repeal, capital gains tax reductions, health care cost reduction and the Farm and Ranch Risk Management Accounts have been favored by agricultural interests.

House Agriculture Committee Chairman Larry Combest (R-TX) said Clinton had "dashed farm families' financial hopes" with a veto that ignores the needs of farmers. The FARRM accounts were designed to allow farmers to save money in good years to be withdrawn, without penalty, to help out in years when prices and incomes were low.

"The President continues to pass up the opportunity to help rural Americans with this veto to a host of producer tax benefits," Combest said. "Even in this time of critical need, when cash income is scarce, farmers are penalized by a rigid and unfair tax code. While large companies can deduct the expense of paying their employees' health insurance premiums, the self-employed family farmer is allowed to deduct less than half the cost for his family's health insurance." The tax bill would have allowed a full deduction of the cost.

"Simple fixes that Republicans have put together could have put real money back in the pockets of rural Americans, but the President stands in the way," Combest added.

In vetoing the $792 billion tax cut, Clinton called it "too big, too bloated (and it) places too great a burden on America's economy." The bill would "force drastic cuts in education, health casre and other vital areas. It would cripple our ability to pay down the debt. It would not add a day to the Social Security trust fund."

Clinton has said he's willing to accept $300 billion in tax relief, but he also wants Congress to approve a tobacco tax and close some business tax breaks to raise revenues. Republican leaders in Congress have indicated they will not support the President on the tobacco tax.