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Historic Anti-Corn Ethanol Amendment Faces Uphill Battle

Almost three-quarters of the Senate approved a measure to end the $6-billion-a-year blenders credit, but its prospects for ultimate passage remain cloudy

Jun 23, 2011
Sen. Dianne Feinstein (D-Calif.)

WASHINGTON—Deficit hawks have practically turned sharpened scissors into a fashion accessory on Capitol Hill. What's shocking some and delighting others is the unexpected pairings of legislators willing to share a whetstone this congressional session.

Take ethanol subsidies, for instance.

Just a week ago, the was taken aback and the was downright giddy when almost three-quarters of the Senate , a liberal-leaning California Democrat, and Sen. Tom Coburn, a debt-obsessed Oklahoma Republican.

Senators agreed to save taxpayers an estimated $6 billion annually by voting overwhelmingly to repeal a tax credit on corn ethanol. What's officially known as the Volumetric Ethanol Excise Tax Credit, the VEETC for short, pays 45 cents for each blended gallon.

"Ethanol is the only industry I know of that receives a triple crown of government support: its use is mandated by law, it enjoys protective tariffs and oil companies receive federal subsidies to use it," Feinstein said. "These flawed policies ... must be changed."

, an organization of ethanol producers, reacted to the 73 to 27 vote with a headlined "Senate Votes to Keep OPEC in Charge of U.S. Economy." Meanwhile, the Renewable Fuels Association is adorning city buses in the nation's capital with ads claiming that corn ethanol reduces gas prices by 89 cents per gallon.

Sheila Karpf, a legislative and policy analyst at the advocacy organization Environmental Working Group, told SolveClimate News that the industry is attempting to downplay the amendment's passage as nothing more than symbolic.

"We're up against a pretty strong horse and this is a historic vote," Karpf explained. "With 73 votes in our favor, that's a pretty big signal that support for corn ethanol is waning.

"For the other side to say it's nothing is a way to cover up how badly they lost. They had to spin it in some way, and that's the way they tried to spin it."

No Guarantees Yet

The Feinstein-Coburn measure, which passed June 16, was tacked on to a bipartisan jobs bill that was larded up with close to 100 other unrelated amendments. Democratic leaders are blaming that clog on GOP senators stretching an agreement made earlier this year that lets floor legislation be laden with unlimited amendments.

Even though the Senate didn't advance the Tuesday, observers are hopeful their anti-corn ethanol amendment still has legislative legs.

"Its prospects in the Senate are unknown right now," Karpf said, adding that she expected the amendment to find another "home" because that initial vote garnered so much bipartisan support. "We really haven't had a stand-alone vote on the ethanol tax ever. Winning with such an overwhelming margin indicates the strength of our coalition."

The amendment also eliminates a 54-cent-per-gallon tariff on imported ethanol. Critics have maintained that the tariff protects the industry from cheaper-to-produce and cleaner-burning sugar-cane ethanol that can come from Brazil.

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