“The provisions were wrapped into a bill that cuts government spending by about $39.7 billion. Because of a minor amendment, the bill returns to the House, which may not get to it until late January, according to an aide to Acting House Majority Leader Roy Blunt .. ” Work on repeal of the so-called cotton Step 2 subsidy began months ago after the World Trade Organization ruled that lavish U.S. subsidies distorted the global cotton market. Negotiators at world trade talks agreed last weekend that countries must end cotton export subsidies in 2006 . The bill would revive the Milk Income Loss Contract (MILC) subsidy for two years at a cost of $1 billion. That could figure in political campaigns next year in the upper Midwest . Under the bill passed by the Senate, the Step 2 program would end on Aug. 1, when the current marketing year ends . Step 2 gives exporters and millers an incentive to purchase higher-priced U.S. cotton. For the past week, the payment was 4.4 cents per lb . The Bush administration suggested immediate termination of Step 2. But the cotton industry said it needed time to adjust, so Congress allowed a transition period. Considering how some sales are agreed months in advance, a final decision on Step 2 was needed soon, said one cotton industry official . Earlier this year, the administration ended a long-term export credit program and retooled a short-term export credit program, also to comply with the WTO decision . The National Cotton Council, which represents U.S. cotton growers, handlers and users, says the decision by trade negotiators for speedy removal of export subsidies “clearly singles out cotton” for unfair treatment .