Bankers are anxiously waiting to find out if President Clinton will follow through on his threats to veto legislation that would provide emergency aid to farmers.
On Tuesday the Senate voted 55-43 to approve a $56 billion appropriations bill that includes $4.2 billion in assistance for farmers hurt by poor weather and record-low commodity prices driven down by the growing global economic crisis.
The aid package includes $1.65 billion for farmers hurt by low crop prices, $1.5 billion for natural-disaster relief, and $175 million for livestock feed assistance.
The House approved the same plan Oct. 2.
But President Clinton has promised to veto the legislation because it falls far short of the Democrats' $7.3 billion proposal. "While this agriculture bill provides some help to farmers, it simply does not do enough," the President said Tuesday.
Compromise is still possible, but time is running out.
One possible scenario is that President Clinton could sign the appropriations bill after Republicans agree to deliver more aid to farmers in a separate piece of must-pass legislation.
At issue between the two parties' proposals is whether to revive a price-support program that the Republicans axed in the 1996 Freedom to Farm Act. That program would buffer U.S. farmers from drastic swings in global commodity prices, but the Republicans maintain that it is too expensive.
The Independent Bankers Association of America and the American Bankers Association are not choosing sides. But the groups said farmers need a guarantee that they will receive the emergency funding before Congress recesses this weekend for the fall election season.
"We want action," said John Blanchfield, manager of the ABA's agricultural division. "Our position is not to endorse either plan."
"The farm assistance package should ensure that farmers have enough income to cover production costs and break even so they can get loans to plant crops next year and pay their expenses," said Bill McQuillan, the IBAA's president, who is chief executive officer of City National Bank, Greely, Neb.
Mr. Blanchfield said wheat farmers in the Pacific Northwest are meeting with their lenders now to determine how much money they must borrow to plant their winter crops. Should Congress compromise on an aid plan this week, farmers will need fewer loans, he said.
"Our bankers and their customers need some certainty of what's going to happen," he said.