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A symbolic blow to ethanol

DANIEL LOOKER 06/16/2011 @ 1:49pm Business Editor

In a second try to eliminate ethanol’s tax credit Thursday, ethanol backers from both parties suffered a big, and at this point symbolic, defeat when the Senate voted 73 to 27 to end the increasingly controversial subsidy on July 1.  It would also end the 54 cent-a-gallon tariff on imported ethanol.

Backers of the amendment offered by Senator Dianne Feinstein (D-CA) needed 60 votes to pass the measure, which was virtually the same as one sponsored by Feinstein and Senator Tom Coburn (R-OK) Wednesday.

Before the vote, one of ethanol’s strongest supporterS, Senator Chuck Grassley, said it was largely “political theater,” since the House would not consider a revenue bill. Under the Constitution, tax legislation must originate in the House.

Feinstein has argued that the ethanol industry doesn’t need the tax subsidy since the 2007 Energy Bill mandates that the oil industry must blend increasing amounts of ethanol into gasoline until 2022.

The vote was more regional than partisan, with nearly all senators from the Corn Belt and northern plains from both parties voting against ending the tax credit before it expires on December 31.

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