The U.S. Senate voted today to kill a major tax break that benefits the ethanol industry, led by a bipartisan group of lawmakers who called the incentive needless and expensive, reports The Hill (http://thehill.com). The vote was 73-27.
Thirty-three Republicans and 38 Democrats supported the measure along with both of the chamber’s Independents, who caucus with Democrats.
The bill by Sen. Dianne Feinstein (D-CA), which mirrors a bill offered by Sen. Tom Coburn (R-OK), was approved despite opposition by Corn Belt lawmakers, who are faced with dwindling support for ethanol.
Feinstein’s amendment to an economic development bill would quickly end the credit of 45 cents for each gallon of ethanol that fuel blenders mix into gasoline. Last year, that credit produced $5.4 billion of revenue, according to the Government Accountability Office.
The amendment also terminates the 54 cent-per-gallon import tariff that protects the domestic ethanol industry.
In an attempt to salvage some support for ethanol, Sen. John Thune (D-SD) and Amy Klobuchar (D-MN), and other ethanol allies, have proposed legislation that would end the 45 cent-per-gallon ethanol blender’s tax credit, but keep a smaller and “variable” blender’s credit for three years when oil prices fall below certain levels.
Despite their legislation, Feinstein and Coburn are still negotiating with Thune and Klobuchar on a possible compromise on ethanol that still aids debt reduction.