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Ethanol Subsidies Survive Senate Vote, Splinter GOP

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Ethanol Subsidies Survive Senate Vote, Splinter GOP


Ethanol Subsidies Survive Senate Vote, Splinter GOP

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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Costly subsidies for homegrown fuel won a vote of confidence today on Capitol Hill. In a key test vote, the Senate blocked a measure that would have immediately ended federal subsidies and protective tariffs for corn-based ethanol. The outcome showed the continued clout of farm states.

As NPR's David Welna reports, it also showed that most Senate Republicans are willing to get rid of at least one tax break.

DAVID WELNA: Where senators stand on ethanol tax breaks often has more to do with which state they're from than which party they belong to.

Senate Minority Leader Mitch McConnell acknowledged it's something that divides his fellow Republicans.

Senator MITCH McCONNELL (Republican, Kentucky; Senate Minority Leader): This is a very controversial subject. We have members in our conference on both sides of this issue.

WELNA: Still, Oklahoma Republican Tom Coburn had been trying for months to force colleagues to take a stand on the more than $5 billion in tax breaks for the ethanol industry this year. Coburn angered some colleagues when he resorted to a parliamentary maneuver late last week to oblige the Senate to vote on taking up his measure.

It would cut off the $3 billion worth of tax credits still to be paid this year to those who by law are already required to blend ethanol with gasoline. According to Coburn, virtually all that money goes to big oil companies, which, he says, don't want it.

Senator TOM COBURN (Republican, Oklahoma): Here's something that is $3 billion that the people were paying to say they don't want the $3 billion, and we're not going to take them up on it? What part of stupid are we?

WELNA: California Democrat Dianne Feinstein said it's Congress that's helped push up food prices by encouraging farmers to grow corn for fuel rather than food.

Senator DIANNE FEINSTEIN (Democrat, California): Diverting 39 percent of our crop towards ethanol is artificially driving up corn prices, which in turn is straying people and industries that depend on affordable corn.

WELNA: But Iowa Republican Charles Grassley argued it makes no sense for Congress to end the tax breaks for corn-based ethanol, which is now 10 percent of the nation's fuel supply.

Senator CHARLES GRASSLEY (Republican, Iowa): We'll get less domestically produced energy. It will cost U.S. jobs. It will increase our dependence upon foreign oil. It will increase prices at the pump for the American consumer.

WELNA: Still, other farm state senators acknowledged that the ethanol subsidies, which still a big issue for presidential hopefuls in Iowa, are getting harder to justify. Amy Klobuchar is a Minnesota democrat.

Senator AMY KLOBUCHAR (Democrat, Minnesota): We're going to see a phasing out of the support for biofuels in terms of federal policy. But the time to do it is not in the middle of the year after seven years of federal support with five days' notice.

WELNA: But for others, this wasn't a vote about ethanol at all. Anti-tax crusader Grover Norquist, who's gotten most congressional Republicans to sign vows not to raise any taxes, questions Coburn's motives in trying to end the ethanol tax breaks.

Mr. GROVER NORQUIST (Americans for Tax Reform): Because what he's trying to do is trick some Republicans into voting for a tax increase so he can say to them, now join me in my support for working with Obama to raise taxes.

Senator PAT TOOMEY (Republican, Pennsylvania): Well, I disagree with that.

WELNA: That's Pennsylvania freshman Republican Pat Toomey. Like the anti-tax Club for Growth that Toomey previously headed, Toomey says he doesn't care if ending the ethanol subsidy does mean a higher tax bill for some people.

Sen. TOOMEY: I think my credentials as a pro-growth, limited government, low-tax guy are pretty strong, and they're going to stay that way. I see this as just egregiously flawed policy that we should fix.

WELNA: Thirty-three other Senate Republicans apparently felt the same way; they too voted to take up Coburn's tax-break-ending measure, as did half a dozen Democrats. That left them 20 votes short of the 60 the proposal would have needed to advance.

Still, the tally showed that when it comes to at least one tax break, even Republicans who generally oppose raising taxes are willing to make an exception, which might also mean some GOP lawmakers could make another exception in a deal to raise the debt ceiling this summer.

David Welna, NPR News, the Capitol.

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