Senate bailout bill includes timber payments

A financial rescue plan approved by the Senate includes a plan to extend a program that pays rural counties hurt by federal logging cutbacks.

Senators inserted the timber provision as one of several sweeteners to attract more votes for the bailout bill, which was defeated Monday in the House. The Senate version of the bill also includes billions of dollars in tax breaks, as well as an increase in the limit on federal bank deposit insurance.

The Senate approved the bill, 74-25.

In the West, the timber provision was a welcome addition. Lawmakers have long been seeking a way to renew the program, which provides hundreds of millions of dollars to Oregon, Idaho and other states, mostly in the West, that once depended on federal timber sales to pay for schools, libraries and other services in rural areas.

The law, officially titled the Secure Rural Schools and Community Self-Determination Act but commonly known as "county payments," helps pay for schools and services in 700 counties in 39 states.

The program expired Tuesday with the end of the fiscal year. The Senate approved a bill last week that would have renewed it for four years, but the House removed the provision two days later, citing objections from the White House.

The Bush administration later issued a statement saying it supports renewal of the timber program, although officials said it should be phased out.

The Senate bill would reauthorize the timber program for four years at a cost of $3.3 billion.

Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, called the program "a great way to boost our economy" by helping to create good-paying jobs in small communities and keep them thriving.

The new funding "will provide a vital shot in the arm to many towns in Montana and around the country," Baucus said.

Sen. Larry Craig, R-Idaho, who co-sponsored the original law eight years ago, called renewal of the program vital to his state.

"The goal of America's public school system should be to provide every student with a world-class education. But in Idaho, as in other states, rural counties - especially those with large areas of public lands which do not contribute tax revenues to schools - have been impeded in meeting that promise," Craig said. "This bill provides the same resources and advantages to rural schools as are enjoyed by their urban counterparts."

Rep. Peter DeFazio, D-Ore., a leading advocate of the timber program, said addition of the county payments extension was not enough to persuade him to vote for the bailout bill, which he called fundamentally flawed.

"Talk about lipstick on a pig - the Senate has simply added a number of popular tax provisions, and a four-year extension of the county payments program, to increase support for a fundamentally flawed bailout bill," DeFazio said in a statement. "They added some tax cuts so Republicans would vote for it, and added mental health parity so that progressives and liberals would pay for it. But it's the same flawed plan that the House defeated earlier this week."

DeFazio has said the bailout plan does not fix the underlying problems in the economy.

Another bailout opponent, Rep. Doc Hastings, R-Wash., also said the timber program was not enough to persuade him to vote in favor of the bill.

"With or without the Senate tax extenders his vote will be based on the provisions of the bailout bill itself," said Hastings spokesman Will Marlow. The timber provision is merely an add-on and does not change the fundamentals of the bailout bill, Marlow said.