"Senate Rejects Effort to Cut Ethanol Subsidy"

"WASHINGTON — A Senate effort to take away ethanol subsidies came up short Tuesday but exposed weakened support for a $6 billion tax break, suggesting that the incentive could be eliminated.

The Senate didn't reach the 60 votes needed to proceed to a vote, undermined by Democratic leaders frustrated at the procedural maneuver used to bring the measure to the floor. But in the process of reaching the 40-59 vote, a coalition of conservatives and environmentalists challenged the legitimacy of the subsidies as their peers became entangled in a larger debate over tax breaks in an age of deficits.

"Even though I've supported this tax credit, for all of the years that I have served in both the House and Senate, I think the time has come," said Sen. Saxby Chambliss (R, Ga.), in a sign of the changing political climate. "I do not intend to support an extension of that tax credit beginning from the expiration at the end of this year."

The domestic industry is protected by a tariff of 54 cents a gallon on imported ethanol. A separate tax credit gives refiners a 45-cent-a-gallon tax credit for blending ethanol into gasoline."

Siobhan Hughes reports for the Wall St. Journal June 14, 2011.


"Senate Keeps Ethanol Subsidies" (Politico)

"Effort to End Tax Credit for Ethanol Fails in Senate" (New York Times)

"Grover Norquist Rebuked By GOP" (Huffington Post)

Source: Wall St. Journal, 06/15/2011