Amendment to end ethanol subsidies fails

An attempt to end the existing subsidy system for ethanol producers failed in the U.S. Senate today.

A motion to end debate on the amendment to an economic development bill brought by Sen. Tom Coburn (R-OK) drew just 40 votes, 20 less than were needed to move to a formal vote. Both Minnesota Senators opposed Coburn’s amendment.

Coburn’s measure would have eliminated the existing 45 cent per gallon tax credit for ethanol producers and a tariff on imported ethanol.

Yesterday, DFL Sen. Amy Klobuchar and Republican John Thune of South Dakota offered up an alternative bill to Coburn’s amendment as part of a bipartisan group of corn state Senators that would establish a glide path away from the current subsidy system for ethanol producers while retaining subsidies for cellulosic ethanol and the construction of dual-fuel pumps at gas stations.

In a statement released after the vote, DFL Sen. Al Franken hailed the measure’s failure.

“Ethanol is an American industry, with American jobs and economic benefits that can’t get shipped overseas,” said Franken. “You’re never going to see a massive ethanol spill in the gulf that destroys peoples’ lives and you’re never going to see foreign countries gang up to restrict the supply of ethanol, driving up gas prices for Minnesota families.”

The vote is also significant because it represents an intra-party spat among Republicans over whether ending tax loopholes constitutes a tax hike.

Coburn insisted that eliminating loopholes without changing tax rates was not a tax increase. A total of 34 Republicans voted in favor of ending debate on his amendment, suggesting that Coburn’s position may have swayed many members of his caucus.

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