WASHINGTON — Two days after voting down a plan to strip the ethanol industry of billions of dollars in federal subsidies, the Senate approved a similar proposal today, but a bipartisan group of largely Midwestern senators who opposed it, including those from Minnesota, are seeking to reach a compromise on any potential subsidy bill.
The legislation would end the 45-cent-per-gallon tax credit on ethanol that is mixed into gasoline and a 54-cent-per-gallon tariff on imported ethanol at the end of the month. Both are set to expire at the end of the year.
The tax credit costs $5.4 billion in lost revenue each year, according to the Government Accountability Office.
Both Minnesota senators, Democrats Amy Klobuchar and Al Franken, voted against the legislation, which was an amendment attached to a large stalled economic bill that has little hopes of passing. In approving the amendment, which passed 73-27, the Senate was essentially signaling its underlying support for an issue that was burdened by procedural controversy this week.
Tuesday’s vote was on identical legislation offered by Oklahoma Republican Tom Coburn, who was criticized for using Senate procedures to force a vote on his measure. California Democrat Diane Feinstein, who sponsored today’s legislation, asked Coburn on the Senate floor to withdraw the bill and work toward a compromise that would draw wider support. He did not, and the bill then failed 40-59.
Klobuchar, along with South Dakota Republican John Thune, introduced an alternative amendment that would end the subsidy (but not the tariff) and redirect $1.5 billion of the savings to investments in renewable fuel infrastructure and $1 billion to deficit reduction measures. The bill would also extend a series of tax credits related to the production of biofuel. Franken and 12 others have signed on as co-sponsors.
Klobuchar’s office said she and Thune are continuing to meet with Feinstein and Coburn to negotiate a compromise between the two pieces of legislation. She said in a statement Thursday: “It should come as no surprise that there is support for phasing out the current ethanol tax credit, the question is when and how. We are continuing to work on a bipartisan compromise that will allow for a reasonable way forward for the biofuels industry and provide significant deficit reduction.”
Among the 20 senators who represent the country’s top 10 ethanol-producing states (which includes Minnesota), only Wisconsin Republican Ron Johnson voted for today’s measure.
Devin Henry can be reached at email@example.com.