Ethanol Subsidies Live to See Another Day

Posted: Jun 14, 2011 4:56 PM

It's official: special interest-catering, environmentally-degrading, market signal-convoluting ethanol subsidies remain intact, at least for now. Politico reports:

The Senate on Tuesday rejected, 40-59, a symbolic attempt to strike ethanol tax subsidies as Democrats are working on a deal to hold at least one vote on ethanol next week.

The amendment from Sen. Tom Coburn (R-Okla.) fell well short of the necessary 60 votes to invoke cloture and limit debate. Five Democrats supported the amendment and 12 Republican ethanol backers, largely from the Midwest, opposed it.

Coburn’s amendment would have repealed a 45-cent-per-gallon tax credit to blend ethanol in gasoline that is set to expire at the end of the year. It is estimated that the tax credit would be worth upwards of $6 billion if it continues the whole year. The amendment also would have repealed a 54-cent-per-gallon tariff on ethanol imports.

Senate Majority Leader Harry Reid told reporters this afternoon he will hold an ethanol vote by June 24 as part of a deal with Sen. Dianne Feinstein (D-Calif.), who had initially co-sponsored Coburn’s amendment.