Senate preserves ethanol subsidy, for now

June 15, 2011

By Stephen Dinan-The Washington Times

The Senate voted Tuesday to preserve billions of dollars in government subsidies for ethanol in a vote that showed senators are not yet ready to undo the corporate handouts that have proliferated throughout the tax code in recent decades.

But Senate Democrats said they will offer lawmakers another chance to vote again by the end of this month, and without some procedural hurdles that ensnared Tuesday’s vote the anti-subsidy crowd could yet win.

“If it weren’t for process, we’d have 60 votes. That’s my belief,” said Sen. Dianne Feinstein, a California Democrat who wants to end nearly $6 billion a year in ethanol aid. But she voted against that stance on Tuesday so as not to undercut her party’s leadership, which is trying to keep a tight grip on action on the Senate floor.

The vote was 59-40 to preserve the tax credit of 45 cents for every gallon of ethanol that is blended into gasoline.

Renewable fuel advocates and Corn Belt senators hailed the vote, saying it preserves – at least for now – federal aid for a homegrown supply of energy.

“We shouldn’t be fighting each other over domestic energy sources,” said Sen. Chuck Grassley, Iowa Republican. “We should be fightingOPEC and the foreign dictators and oil sheiks who have a hold over America’s economy and national security.”

The vote was the first in what is expected to be a growing series of skirmishes over corporate aid in the tax code.

Ethanol has proved to be a popular target for free-market conservatives because the government already mandates that a certain level of renewable fuels be blended with gasoline, which provides a ready-made market for ethanol and, the conservatives argue, makes the extra subsidy unnecessary.

But ethanol is far from the only target.

In the House, Republicans are fighting a behind-the-scenes battle over a bill offering subsidies for filling stations and truck and car owners who switch to natural gas. Nearly 200 House members have signed on as co-sponsors, and chief backers say it is a way to promote an abundant American energy supply, boosting jobs along the way.

Opposition, though, is growing, with free-market advocates cajoling a handful of lawmakers to withdraw their support from the bill. One group, Americans for Prosperity, is running radio ads charging the bill’s supporters with trying to pick winners and losers, which the group says amounts to caving on conservative principles.

Sen. Tom Coburn, Oklahoma Republican and author of Tuesday’s proposal to end the ethanol subsidy, said the failed vote reminded him of the first time he tried to end spending on the so-called “Bridge to Nowhere” in Alaska, which became the poster project for runaway earmark spending.

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1 Comment - what are your thoughts?

  • Lon Ball says:

    If anyone is sincere about ending energy subsidies, do not forget the biggest and longest boondoggles; the subsidies for oil (depletion allowances, give away leases and non-payment of lawsuits in the case of Exxon and BP) and nuclear energy. After Fukishima, Sen. Liebermann gave lip service to going slow with extending operating licenses to old GE plants while still supporting publicly subsidized disaster insurance that no private insurance company would touch. Without subsidy, the nuclear industry would not exist. They get counless subsidies from a bottomless pork barrel, from Dept. of Energy (DOE) and public university research to legally binding promises to store their waste, if it were only possible to safely store for the 300,000 years of acute danger.

    The biggest oil subsidy is the perpetual warfare and taxpayers getting the bill for CIA and the Pentagon’s perpetual war to steal oil fields from the Moslems, West Africans and South Americans.

    Natural gas subsidy might be the only one that makes sense.

    Keep in mind when reading the Washington Times that it is owned by the king Moonie, Sun Myung Moon, a foreigner who was convicted of tax evasion and spent time behind bars. Moon is an old time red baiter and pretender to being Christ’s Second Coming. There is no intergity to the Times editorial policy. It is simply un-American.

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