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Ethanol tax credit vote still likely this year—Harkin

DANIEL LOOKER 09/30/2010 @ 9:20am Business Editor

When the Senate adjourned yesterday it left a lot of business unfinished until the lame duck session after the November 2 elections. It includes debate over whether or  not to extend the Bush era tax cuts, which expire this year.

An extension of tax credits for ethanol and biodiesel are likely to be part of that debate, Senator Tom Harkin (D-IA) told reporters Thursday.

He disagreed with his Iowa colleague, Senator Chuck Grassley, who said earlier this week that if the Republicans win control of Congress in the November elections, they might want to defer some tax decisions until 2011.

Harkin said he still expects extending tax credits that have expired (biodiesel) and ones that expire this year, including the 45 cent-a-gallon ethanol blenders credit, to be part of an omnibus tax bill likely to come up for a vote in December.

Allowing the Bush tax cuts to expire “would create a lot of havoc out there,” Harkin told Agriculture.com. Many business leaders have already criticized uncertainty over taxes as being a drag on the economy. And the estate tax, which ended temporarily this year, would revert to pre 2001 levels, with a $1 million exemption.

If victorious Republicans choose to write a tax bill in 2011, even if it’s retroactive to this year, it would take time to finish, Harkin said.

“They wouldn’t be able to get a tax bill through until next summer at the earliest,” Harkin said. Then it might face a presidential veto and more debate in Congress in an attempt to override that veto.

“It could take a long time. They’d better get it done (in the lame duck session),” Harkin said.    

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