Senate Kills Ethanol Tax Credit
Coburn amendment may have failed, but under Feinstein's name, the same measure passes. McCain move to stop infrastructure support fails. Of course the underlying bill has to pass for the measure to go into effect.
Compiled by staff
Published: Jun 16, 2011
UPDATED: By a vote of 73 to 27 the Senate voted to kill the ethanol tax break. The vote could also have an impact on future votes on ways to cut the deficit as well, according to wire reports.
Earlier this week a move by Sen. Tom Coburn, R-Okla., to kill the tax credit failed due to a procedural fight. The Republican measure failed 59 to 40. However, on its return trip to the Senate today, the votes were there to kill the tax credit. The new measure - nearly identical to Coburn's - was pushed by Sen. Dianne Feinstein, D-Calif., - and passed even with Corn Belt opposition.
The amendment, to an economic development bill, would end the 45-cent tax credit for blenders of the biofuel. The credit cost more than $5.4 billion in foregone revenues last year.
And the amendment ends a long-time 54-cent tariff on ethanol imports, which protected the U.S. ethanol industry. No matter what your opinion of ethanol, today the industry is now on its own - with no government support.
One issue that is settled too was the controversial idea that ending a tax credit was itself a tax increase - something a staunch group of conservatives opposes. However, the vote today shows that this argument may not carry much weight in the move to end the deficit.
The White House had supported the blender credit, but also said it would support other approaches, such as the bill floated by Sen. John Thune, D-S.D. and Sen. Amy Klobuchar, D-Minn., that would phase out the credit.
Feinstein's amendment is attached to a Senate spending bill that may not pass, which gives the industry some breathing room. However, it's clear that the sentiment of the senate is no longer pro-ethanol.
McCain move fails
Another amendment pending, from Sen. John McCain, R-Ariz., would have prevented the use of federal funds for investment in blender pumps or other ethanol infrastructure. That move amendment failed in the Senate.
Look for more market react to these ethanol votes in Friday's news update.
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Tagged: ethanol, Corn Belt
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