(CNSNews.com) - President Bush is threatening to veto a "bloated" farm bill. And while Republicans complain about taxpayers being forced to support wealthy farmers -- the bill also includes a Republican-sponsored tax break for thoroughbred racing.

Sen. Mitch McConnell (R-Ky.) announced Thursday that his legislation "to promote investment in the horse industry" had been approved and included in the farm bill.

The McConnell measure would make sure that all race horses are depreciated over 3 years for tax purposes -- regardless of when the horses start training. Current tax code does not accurately reflect the length of a horse's racing life, McConnell's Web site says.

"The horse industry is a vital part of Kentucky's economy and cultural heritage," McConnell said. "Horses are Kentucky's largest agricultural product. The industry contributes $3.5 billion to Kentucky's economy and directly employs more than 50,000 Kentuckians."

He also pointed to a recent study showing that the horse industry contributes approximately $39 billion a year to the U.S. economy.

Veto expected

House and Senate negotiators announced Thursday that they'd reached a compromise on the complex legislation. "The president will veto this bill," Agriculture Secretary Ed Schafer promptly said.

The cost of the legislation (around $290 billion over five years) and the amount of subsidies for wealthy farmers were the major sticking points for the White House.

The final bill would allow taxpayer subsidies for farmers making up to $500,000 a year in non-farm income. If farm income exceeds $750,000, an individual would no longer be eligible for subsidies.

Why should taxpayers fund wealthy farmers, critics ask. "I think, in a time of high commodity prices, to be raising loan limits and (subsidies) just really flies in the face of reality," said House Republican Leader John Boehner.

Critics say higher subsidies lead to higher food prices for all Americans.

Republicans also accused Democrats of using the farm bill as a slush fund for scores of "bizarre earmarks and wasteful spending projects."

Veggies for kids, support for organic farming

According to Senate Agriculture Committee Chairman Tom Harkin (D-Iowa), "The bill provides a strong safety net, so it's good for our farmers and producers. Consumers will like it because it will increase farmers' markets and ensure a safe, dependable supply of high quality food.

"For low-income Americans, it ensures nutrition needs are met and for school children, increases their access to fresh fruits and vegetables. And as production increases, the farm bill will ensure our precious natural resources are protected."

Among other things, the bill updates the name of the Food Stamp Program, which now becomes the "Supplemental Nutrition Assistance Program."

It includes a "tremendous expansion" of the Fresh Fruit and Vegetable Program, which provides free food to low-income children in schools. Over the next ten years, $1 billion is invested in this initiative, the Senate Agriculture Committee said.

It provides $78 million for organic agriculture, enhancing the ability of organic producers and processors to grow and market organic food, feed and fiber.

The bill also provides more than $1 billion to expand the supply of biofuels made from biomass and crop byproducts other than grain. And it includes new support to farmers who grow energy crops, and to entrepreneurs who build refineries to convert biomass into fuel.

The legislation is expected to reach the House and Senate floors next week. The current law expires May 16, and several negotiators have said they will work to override a White House veto.

President Bush has indicated he will press lawmakers to pass a one-year extension of the current law, rather than sign a bill he doesn't like.