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Senate Votes To Stop Ethanol Tax Credits Senate Votes To Stop Ethanol Tax Credits

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ENERGY

Senate Votes To Stop Ethanol Tax Credits

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Sen. Tom Coburn, R-Okla.(Chip Somodevilla/Getty Images)

The Senate on Thursday overwhelmingly voted, 73-27, to repeal $5.4 billion worth of ethanol subsidies.

The largely symbolic victory for ethanol opponents is significant because it shows that a majority of the upper chamber doesn’t think the industry needs the subsidies, which have been in place for almost 10 years. It could open up the floodgates for Congress to ax other tax subsidies.

 

The vote was on a measure sponsored by Sens. Tom Coburn, R-Okla., and Dianne Feinstein, D-Calif., to repeal the subsidies and a corresponding import tariff. The measure leaves in place the renewable-fuels mandate, which many major ethanol producers say is the main reason they invest in ethanol. The Senate also voted down, 41-59, another measure introduced last week by Sen. John McCain, R-Ariz., that would restrict federal funds from going toward ethanol infrastructure, specifically blender pumps.

Passage of the Coburn-Feinstein amendment is likely mostly symbolic. It would raise revenue for the government since it repeals tax credits and sends money back to the Treasury Department. Since it does, it must be blue-slipped to the House, because all revenue-generating bills must originate in the lower chamber. Aides and lobbyists say the underlying bill, the economic-development aid bill, is unlikely to pass. Coburn said after the vote that Senate Majority Leader Harry Reid, D-Nev., said he could find a vehicle to get it through the House. Coburn also said a repeal of the subsidies would end up in any overall budget package Congress is negotiating now.

Feinstein said after the vote that she wants to talk with two farm-state senators, Sens. John Thune, R-S.D., and Amy Klobuchar, D-Minn., who have introduced legislation that would gradually phase out the subsidies. She said she wants to find a compromise and is planning on talking to them soon.

 

The vote reverses what occurred on Tuesday when the Senate voted down the same measure, 40-59. Democratic leadership whipped against it, complaining about the way Coburn forced the vote. Several Democrats said after that vote that they voted against the amendment only because of Coburn’s procedural antics.

The vote to repeal the subsidies is all that much more notable because the White House issued a statement on Thursday opposing both the Coburn-Feinstein amendment and the McCain amendment. President Obama has always opposed repealing the subsidies, but his willingness to stick his neck out on this issue during the 11th hour is telling.

Meanwhile, the House on Thursday easily approved a measure similar to McCain’s amendment as part of the overall agriculture appropriations bill. An amendment from Rep. Jeff Flake, R-Ariz., prohibiting funds from being used to build ethanol-producing plants passed 283-128.

 

 

Olge Belogolova, Dan Friedman, and Meghan McCarthy contributed. contributed to this article.

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