How the stars aligned for ethanol
In spite of the coverage you’re seeing of angry liberals in the House and of Senator Bernie Sanders’ (I-VT) filibuster in the Senate, the Obama-congressional compromise on extending tax cuts is very likely to pass, and the new law is almost certain to continue the ethanol tax credit for another year at the current rate of 45 cents a gallon.
This strong possibility wouldn’t even exist without several breaks for the industry, says an influential member of the House, a key Senate staffer and ethanol insiders.
First, when President Barack Obama’s chief of staff, Rahm Emanuel left last October to run for Mayor of Chicago, he was replaced at the White House by Pete Rouse as interim chief. Rouse once headed the staff for former Democratic Senator Tom Daschle of South Dakota, and is said to be supportive of the ethanol industry.
See more on the tax credit:
- Ethanol lobby looks ahead
- Groups pleased with Senate bill
- Talk: Credit survives
- Can the industry survive without a credit?
- Tax credit set at 45 cents
- Lower rate for ethanol credit likely
- Tax deal includes ethanol, biodiesel credits
“Pete deserves credit for this. Thank God we’ve got him over there,” Representative Collin Peterson, a conservative Minnesota Democrat told Agriculture.com Friday. “Pete knows this stuff. He knows all the issues and the politics. We couldn’t have anybody better over there [at the White House].’”
The ethanol industry had many strong advocates in the Senate fighting to get the ethanol tax credit included in the bill, Peterson said. They included Democrats Tom Harkin of Iowa and Amy Klobuchar of Minnesota, Kent Conrad of North Dakota. But the key player may have been Republican Chuck Grassley of Iowa. This is his last month as the ranking Republican on the Senate Finance Committee, and the timing couldn’t have been better for the ethanol industry since Grassley has long been one of its strongest champions.
Grassley was the one who fought hardest for keeping the tax credit at 45 cents. Earlier this year the House Ways and Means Committee considered a 36 cent credit, a 20% cut, and this month the Senate’s Democratic Finance Committee Chairman, Max Baucus of Montana, also introduced a tax bill with the credit at 36 cents.