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Biodiesel tax credit rejected in Senate

DANIEL LOOKER 09/16/2010 @ 1:37pm Business Editor

The partisan logjam broke in the Senate Thursday, long enough to pass the Small Business Jobs and Credit Act. But when Senator Chuck Grassley (R-IA) tossed in a small twig – an amendment to renew a long-expired biodiesel tax credit  --  a vote of 41 for and 58 against kept the measure stalled in a legislative backwater.

The vote was “very disappointing,” Alicia Clancy, a spokeswoman for the Renewable Energy Group told Agriculture.com. “Senators with biodiesel plants in their states voted on both sides. Democrats and Republicans voted on both sides.”

The $1 a gallon tax credit for biodiesel expired at the end of last year and even though it’s not considered controversial, it has gotten caught up in partisan wrangling over how to pay for it. More than 20,000 jobs in the biodiesel industry have been lost as plants have been idled or slowed down. Some plants are already insolvent.

“As we're faced today with a 9.6% unemployment rate, I have a solution that will create 20,000 jobs almost overnight,” Grassley said on the floor of the Senate Thursday. “That solution is to extend the biodiesel tax credit today.”

“I have twice sought to have the biodiesel tax credit simply passed through the Senate by unanimous consent. However, both times my request was objected by those on the other side of the aisle,” Grassley said.

Thursday's vote on the biodiesel tax credit was not along party lines. Of the 41 who supported Grassley, 16 were Democrats, including Tom Harkin of Iowa. Before the vote, Harkin said he also supported Grassley’s effort to get the tax credit reinstated retroactively to the start of 2010. But the effort also did not have an offset that would show how the tax credit would be paid for, Harkin told Agriculture.com.

And the vote fell far short of the 67 that were needed to suspend Senate rules to accept Grassley’s amendment.

The American Soybean Association leadership  was also disappointed by the outcome of Thursday’s vote.

“Biodiesel has provided a significant market opportunity for U.S. soybean farmers, as well as jobs and economic development for rural communities,” ASA President Rob Joslin said in a statement. “ASA appreciates the efforts of Senator Grassley to include the long overdue extension of the biodiesel tax credit in this Bill.”

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