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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (384492)	5/15/2008 10:35:38 PM
From: TimF	Read Replies (1) \| Respond to of 1572911

Constituency of One The farm bill includes a plum deal for Plum Creek Timber. By David Freddoso Of all of the current Congress’s attempts to manage the U.S. economy — housing bailouts, “stimulus” packages, an energy bill that bans light bulbs — the farm bill is probably the most exasperating. This year’s bill, should it ever pass, will further prop up prices for sugar, and it will encourage farmers to plant crops for which there would otherwise be no demand. And farm bills receive broad bipartisan support — even as they pay non-farmers for living on former farmland. But this year’s farm bill contains a special-interest provision you’ve probably never heard of — the Qualified Forestry Bonds program. This provides federally funded tax-credit bonds for forest purchases that meet the following four criteria: The forest must be adjacent to U.S. Forest Service Land; Half of the parcel must be turned over to the U.S. Forest Service; It must include at least 40,000 total acres; and It must be subject to a “native fish habitat conservation plan approved by the United States Fish and Wildlife Service.” Your initial reaction might be, “What’s so bad about that?” The government does far more damaging things than forest-land preservation, after all. But this farm-bill provision offers a lesson on how things are sometimes done in Washington. Only one parcel of land in the entire United States meets the criteria set for the Qualified Forestry Bonds program. You see, the U.S. Fish and Wildlife Service has approved exactly one “Native Fish Habitat Conservation Plan,” covering a 1.6-million-acre parcel that reaches from western Montana into eastern Washington State. And that parcel is owned by the Plum Creek Timber Company, the single largest private landowner in the United States. Plum Creek Timber (PCL), with a market cap of $7 billion, began its corporate life in 1987 as Burlington Resources, spinning off of Burlington Northern to manage the railroad giant’s timber and mineral resources — some of which date back to the original railroad land grants of the Lincoln administration. In 1999, Plum Creek became a Real Estate Investment Trust, and began unloading its land holdings for high-end residential and recreational use. Today, with the real-estate and timber markets flat, Plum Creek has been looking to sell larger tracts of timberland to large institutional investors. The farm bill’s Qualified Forestry Bonds provision could provide up to $500 million to help sweeten such deals. Plum Creek spent some $220,000 lobbying Congress in the first quarter of this year. Its PAC has spread $400,000 in campaign contributions between the parties in the last decade. PCL Employees have given $16,600 this cycle to Sen. Max Baucus (D., Mont.), chairman of the Senate Finance committee and the author of the bond provision. Baucus, whose staff did not answer inquiries, was enthusiastic enough about the forestry bonds that he put them into the Farm Bill (H.R. 2419), though they have nothing to do with agriculture. The bonds also didn’t have anything to do with energy when Baucus put them in last year’s energy bill. In response to this blatant rent-seeking, Rep. Eric Cantor (R., Va.), is proposing a non-binding motion to remove the forestry bond provision from the farm bill. But Cantor tells National Review Online that he expects his motion to fail. Since half of the land sold under the provision will go to the federal government — preserving it as pristine wilderness and preventing its eventual development — pols courting the environmental vote are unlikely to stand against it. However green it may seem, this provision is little more than a massive corporate subsidy for a single company. Cantor called the forestry bond program “a Bridge to Nowhere in the Farm Bill,” referring to the infamous Alaska bridge that had been inserted into the 2005 transportation bill. “If it’s a legitimate program to preserve lands adjacent to federal forests, fine,” says Cantor. “But to engage in backroom deals designed to benefit one landowner? That’s exactly why people distrust Congress and feel that Washington is broken.” The tax-credit bonds that would be made available for the sale of Plum Creek lands are not the same as bonds that are merely “tax-exempt.” Tax-credit bonds, partly frowned upon by the non-partisan Congressional Budget Office as an inefficient funding vehicle, pay out 70 percent of their interest in the form of federal income tax credits that can be rolled from one year to another. In other words, the federal government pays 70 percent of the interest to the bondholders. If the government did this for your 6-percent, 30-year mortgage, your monthly payment would drop by about 40 percent, and you would be able to buy a more expensive, bigger home. Likewise, the forestry bonds could facilitate the sale of more of Plum Creek’s land at a higher price. This is why Ways and Means ranking member Jim McCrery (R., La.), in floor debate, rejected the argument that this is not an earmark because the benefit cannot be said to go to the bondholders. “They’re not going to be the ones getting $500 million for a piece of property,” he tells NRO. “It is one landowner.” The Joint Economic Committee estimates that the Qualified Forestry Bonds provision could cost the government $257 million over the course of ten years — a plum deal for Plum Creek. Now it’s possible that more “fish habitats” will be created, so that more landholders might benefit from this taxpayer largesse. (They’d better hurry: the fine print states that they must be established within two years to get a bond issue.) But if the farm bill passes as is, then there certainly will be plenty of money available to buy Plum Creek’s land, at least. — David Freddoso is an NRO staff reporter. article.nationalreview.com coyoteblog.com