Bipartisan Push to End Some Ethanol Subsidies by August

Katie Pavlich

7/7/2011 1:57:00 PM - Katie Pavlich

Well look at this, something democrats and republicans can agree on: an end to inefficient ethanol subsidies.

Key Senate lawmakers have reached a deal to end two ethanol subsidies by the end of the month, sooner than expected and a sign of how tax policy can change as attention focuses on the deficit.

Sen. Dianne Feinstein (D, Calif.) said in a statement that she had reached an agreement with Sens. Amy Klobuchar (D, Minn.) and John Thune (R, S.D.) under which a 45-cent-a-gallon tax credit for blending ethanol into gasoline would expire on July 31. A 54-cent-a-gallon tax on imported ethanol would also expire at the end of the month.

Some $1.33 billion in savings would be used to reduce the $14.29 trillion U.S. debt. A third of the savings—an estimated $668 million—would be used to extend tax credits, such as those for alternative-fueling infrastructure like ethanol pipelines that some producers hope to build.

Hopefully President Obama and Congressional leadership will takes notes before going back into debt ceiling talks on Sunday.