With Vice President Dick Cheney casting the tie-breaking vote, the Senate finally approved a budget-reconciliation bill yesterday. In addition to cutting $40 billion in government spending, the bill also includes a two-year extension of the Milk Income Loss Contract program.
The battle to pass the budget-reconciliation bill in the Senate was heated. At one point Sen. Harry Reid, D-Nev., the Senate Minority Leader, threatened to remove MILC from the budget bill with the hope of defeating the budget bill altogether. Although supporters of the MILC were able to keep the program intact, Democrats were successful at forcing some changes. As a result, the bill will now have to go back to the House for another vote. The House originally passed the budget-reconciliation bill on Monday. Since many lawmakers have already returned home for the holidays a timeline for the vote is uncertain. However, the bill is expected to pass.
The MILC extension is retroactive back to Oct. 1. However milk prices in October and November were above the trigger price. The December milk price fell to $13.57. That is low enough to trigger a small payment of about 4 cents per hundredweight.
The payment level of the MILC program has been scaled back. Instead of receiving 45 percent of the difference between the target price of $16.94 and the current Boston Class I price, producers will now receive 34 percent of the difference. (The Boston Class I price is the Class I mover + $3.25 differential.) The payment cap is still set on the first 2.4 million pounds of milk. The revised MILC program is estimated to cost about $1 billion.
To read an article from Yahoo News on this topic, go to: http://news.yahoo.com/s/ap/20051221/ap_on_go_co/congress_dairy_program_1
Yahoo News, WRGB.com, Associated Press