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Senate Votes To End Ethanol Tax Credit

Coburn

First Posted: 06/16/11 06:28 PM ET Updated: 08/16/11 06:12 AM ET

WASHINGTON -- The Senate voted on Thursday to kill a major break for the ethanol industry while leaving the door open to future negotiations on continuing such assistance.

Senators voted 73-27 in favor of an amendment to immediately remove a 45-cent-per-gallon tax credit on ethanol-gasoline blend set to expire at the year's end and eliminate a 54-cent-per-gallon tariff on imported ethanol. The legislation, which preserves $6 billion in tax breaks for ethanol producers, was introduced by Sens. Sen. Dianne Feinstein (D-Calif.) and Tom Coburn (R-Okla.).

“Today’s vote was a major victory for taxpayers and a positive step toward a serious deficit reduction agreement, which is our only hope of averting a debt crisis," said Coburn in a statement. "An overwhelming bipartisan majority of senators embraced pro-growth tax reform while rejecting the parochial politics that so often paralyzes the Senate. The best way to reduce our crushing $14.3 trillion debt is by reducing wasteful spending a billion dollars at a time. This amendment saves taxpayers $3 billion. In light of today’s lopsided vote, I urge my colleagues in the House to eliminate this wasteful earmark and tariff at their earliest opportunity."

The amendment drew the support of a broad coalition of organizations, from Koch Industries to Sierra Club. But farm state lawmakers were not without victories.

In a 41-59 vote, lawmakers rejected a measure introduced by Sen. John McCain (R-Ariz.) to slash federal funding for ethanol refueling infrastructure, including blender pumps or storage facilities.

The votes sent mixed messages about lawmakers' support for a farm state industry at risk of becoming a casualty of the budget cutting battle.

“This vote signifies that an anti-ethanol wave in Congress isn’t swelling," said the Renewable Fuels Association in a statement after the vote. "Lawmakers must now pivot to fact-based, comprehensive discussions about diversifying America’s fuel markets and weakening the grip of OPEC and other nation’s over our economy and energy security. American ethanol producers look forward to working in a constructive manner with lawmakers keeping an open mind about the future of American energy production.”

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