I'm not a policy expert, but I'm pretty sure it's not a good idea to trim Medicare payments for oxygen to boost spending on the farm bill. You can have that advice for free.

That was one of the proposals the White House has offered to House Agriculture Committee Chairman Collin Peterson, D-Minn., to pay for the farm bill.

The administration, in a letter, has identified up to $22 billion of its own potential budget offsets for the farm bill. Those included a web-based demonstration project for the Medicaid program; more flexibility in the federal employees insurance program; eliminate unemployment overpayments to people; and eliminate Medicare overpayments to people who use Medicare for oxygen purchases. Peterson wasn't excited about any of those potential offsets.

"They finally have listed some offsets, but most of these are pretty problematic," Peterson said. "Some of our critics would probably have a field day if we are taking payments going to people on oxygen and they would say we are giving it to wealthy farmers, probably."

Saying he has reached out extensively to the Bush administration, Peterson said there are just a few days left to reach a deal with the White House before other options have to be considered. Peterson spoke by teleconference in Washington, D.C., to members of the National Farmers Union at their annual convention in Las Vegas.

"At some time, we have got to fish or cut bait," Peterson said.

Key senators in the farm-bill debate made similar comments late last week. Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, Ranking Member Saxby Chambliss, R-Ga., and Senate Budget Chairman Kent Conrad, D-N.D., all talked about going ahead and sending a bill to the president.

Peterson said Republicans on the House Agriculture Committee are aware of how much he has worked with the White House and it may be possible to get a farm bill with sufficient Republican support to override a veto threat. Lawmakers Could then end this laborious farm-bill process.

"I just can't imagine they would be dumb enough to veto a bill under those circumstances," Peterson said. "Maybe they are."

The extension of the 2002 farm bill ends March 15. Regardless of whether a deal is agreed to, it's now likely there will be at least another one-month extension to iron out details and debate some final policy issues in conference after the money situation is resolved, Peterson said Sunday.

For now, the last piece of the puzzle is coming to terms on the kind of offsets that could be used to pay for that $10 billion, Peterson said. The tax-writing committees in Congress were supposed to come to terms on that last Friday, but failed to do so.

Peterson was expected to attend the National Farmers Union convention, but had to stay in Washington because of negotiations. Over the weekend, he met with Harkin, Conrad, as well as House Republicans. Peterson said lawmakers are moving ahead slowly on the offset talks, but at least they are not moving backwards.

"We hope to get that done by the first of the week," Peterson said. "Then we are ready to get the rest of the pieces to fall into place."

The Bush administration sent over to Peterson on Saturday a laundry list of "parameters for a successful farm bill" that Peterson had been requesting. That laid out several detail in the farm bill the administration wants and potentially successful offsets. The letter states the administration "is willing to consider" a farm bill with $10 billion in spending above the budget baseline over 10 years, if the farm bill contains significant program reforms.

Such reforms for the administration would include no increase in marketing-loan rates, counter-cyclical target prices in commodity crops or the Milk Income Loss Contract program payment to dairy farmers.

The administration also stands by its "beneficial interest position," meaning that farmers would have to give up beneficial ownership interest in their crops to lock in a loan-deficiency payment. USDA made that proposal in the department's farm bill last year because farmers took advantage of a drop in commodity prices in fall 2005 due to Hurricane Katrina, locked in LDPs, but held on to the grain until prices increased.

The administration also wants the marketing loan program to become a recourse loan as part of creating a revenue-based counter-cyclical program, "which I have told them I will not support," Peterson said.

Other demands by the administration would eliminate all planting restrictions on commodity-crop land, which the World Trade Organization has raised as a problem with the U.S. commodity programs. The administration also want to remove from the farm bill a proposed sugar-to-ethanol program, which would allow ethanol plants built for sugar processing to buy cheap sugar from the federal government for feedstock.

The administration also renewed its proposal to take up to 25 percent of foreign food-aid money to buy food from local sources closer to locations of international hunger needs, rather than rely solely on U.S. commodities. Food-aid groups right now are lamenting the cost of U.S. commodities hurting food-aid efforts internationally.

The administration's letter to Peterson is filled with language of "must have" items identifying policy that the administration would require in the bill. Peterson said the administration is not going to dictate what is in the final bill.

"Obviously, in a lot of these areas, we just aren't going to be able to do what they are asking," Peterson said.

The administration has come down on its proposal for adjusted gross income eligibility for farm payments, Peterson said. The letter states the administration would agree to a $500,000 adjusted gross income cap, which is already in the House bill for farmers who make less than two-thirds of their income from agriculture.