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Senate rejects bid to kill corn ethanol subsidy

ethanol.coburn.JPGThe US Senate rejected an effort to eliminate costly federal subsidies for corn ethanol Tuesday afternoon, even as lawmakers on both sides of the debate agreed that the time has come to do exactly that.

The 40-59 vote came courtesy of Republican Senator Tom Coburn of Oklahoma, whose amendment would have immediately eliminated a tax credit of 45 cents per gallon (12 cents per litre) for ethanol refiners as well as a separate tariff of 54 cents per gallon (14 cents per litre) on imported ethanol. The amendment failed 40-59, falling well short of the 60 votes necessary to overcome a the Senate’s famous filibuster, but supporters say the tide is turning and suggest that things might play out very differently in weeks ahead.

The ethanol subsidy amounts to $6 billion annually and has become a controversial hallmark of farm-state politics. Critics point out that the government is already mandating the use of ethanol, so why would the industry need tariff protection and tax breaks? Moreover, Coburn says, the industry is already eating up 40 percent of the US corn crop to produce a fuel that has questionable environmental benefits.

“It just doesn’t make any sense,” he says, pointing out that most of the money actually goes to oil refiners who have already said they neither need it nor want it. “We continue to spend money that we don’t have on things that we don’t need.”

Coburn used procedural rules to force the hand of Democratic leadership, which had sought to postpone the vote. In the end, even cosponsor Diane Feinstein, a Democrat from California, urged him to withdraw the amendment and work with Democratic leaders, who on Tuesday agreed to hold another vote next week. “I believe if it weren’t for the process we would have sixty votes,” she said.

On the other side of the debate, even the supporters of the subsidy acknowledged that it might not last. “There is going to be a change with biofuels in this country,” said Minnesota Democrat Amy Klobuchar. “We are going to see a phasing out of the support for biofuels in terms of federal policy, but the time to do it is not in the middle of the year after seven years of federal support with five days’ notice.”


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