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Harkin worries about ethanol tax credit

DANIEL LOOKER 03/31/2011 @ 3:49pm Business Editor

A bipartisan amendment introduced in early March to repeal the 45 cent-a-gallon tax credit died in the Senate this week when one of its sponsors, Senator Tom Coburn (R-OK) said he would not hold up a small business bill to force a vote.

 Coburn, and the bill’s cosponsor, Senator Ben Cardin (D-MD) may not have had the 60 votes needed to overcome a filibuster. But Coburn indicated that he might try to seek a suspension of rules that would allow another vote on his amendment. That would take 67 votes.

Senator Tom Harkin, one of the midwestern senators who strongly support ethanol, told agriculture.com that he doesnt take much comfort from that.

Harkin said he doubts Coburn will get 67 votes. But any vote on the amendment would show exactly how much support Coburn has. If he gets 62, for example, that’s a signal that Cobern has enough support get his amendment passed with another bill, Harkin said, and we’ll lose the tax credit and we won’t have anything to replace it with. That’s my big worry”

Harkin said that he tried to get Senate passage of a provision in last December’s tax bill that would have cut the ethanol tax credit by 20% but would have also added infrastructure to support the ethanol industry with:

--a mandate for more flexible fuel vehicles that can burn up to 85% ethanol blends

--grants to help retailers install blender pumps that can dispense varying levels of ethanol in gasoline

--and loan guarantees for a dedicated pipeline to transport ethanol from the Midwest to the East Coast.

Harkin said the ethanol industry didnt support that approach at the time. At the last minute, the Senate supported maintaining the full tax credit for the rest of this year.

If Coburn succeeds in repealing the ethanol tax credit, Harkin said he’ll still try to get legislation passed to build ways for ethanol to reach the market. But ethanol industry supporters will have lost a key bargaining chip.

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