Senate Votes to End Costly Ethanol Subsidies

Jun 16, 2011 3:54pm

ABC News' Sunlen Miller (@sunlenmiller) reports:

The Senate today has overwhelmingly voted to end subsidies for ethanol, which will abolish the industry’s 45- cent-per-gallon subsidy for ethanol blenders, which was due to expire at the end of the year.

By a vote of 73-27 the Feinstein, D-Cali.,-Coburn, R-Okla., amendment was adopted within the unrelated Economic Development Administration Reauthorization legislation. Thirty-three Republicans and 38 Democrats supported the amendment – 14 Republicans and 13 Democrats voted against it.

The amendment, ending the 45-cent-per-galon subsidy given to refiners for blending ethanol into gasoline, saves nearly $6 billion per year and $3 billion this year alone.

But the vote was really a political statement in nature – by party but of course by region of each senator – forcing legislators, including those from the “Corn-belt” to go on the record with their vote, while cost-cutting discussions dominate the Hill as the Congress attempts to broker a deal to raise the debt ceiling to avoid default by August 2.

Eyes were on the votes of Senate Republicans – many who were hesitant to kill the subsidy because it could be seen as a tax increase.  Grover Norquist who heads Americans for Tax Reform has said that voting for the plan would violate the anti-tax pledge most Republicans signed.

Many Democrats hailed the adoption of the plan as a “watershed moment” for the on-going negotiations to reduce the deficit, and that even if it does not pass in the House it is a “signal” to the negotiators that these sorts of subsidies and taxpayer support of the industry must end.

Also voted on today was a Sen. McCain, R-Ariz,. Amendment that would block taxpayer dollars from funding ethanol blending pumps and storage infrastructure. That was ultimately not adopted, defeated by a vote of 41 to 59.

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