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Spending bill spares E15

DANIEL LOOKER 03/02/2011 @ 12:09pm Business Editor

A spending bill that keeps the federal government going for two more weeks will not stop EPA from putting regulations in place for 15% ethanol blends (E15) or cut food programs for the poor, as a House bill passed last month would have done.

“There were no riders” in the continuing resolution, said Senator Tim Johnson (D-SD) who was among 91 senators voting for the bill Wednesday. The bill cuts about $4 billion from last year’s spending levels in the current 2011 federal budget and gives House and Senate another two weeks to reach an agreement on steeper spending cuts.

Last month the House voted to trim current spending by $61 billion, fulfilling campaign pledges by freshmen Republicans to sharply lower spending.  The Obama Administration and Senate Democrats are citing estimates by some economists that cutting that much from the government would eliminate up to 700,000 jobs this year.

When asked if he thought the next spending bill to come up for a vote in the Senate will prevent EPA from implementing E15 labeling, Johnson said he didn’t think it would have a lot of riders—amendments or attachments—added to it.

“I think it will be as clean as possible,” he told Agriculture.com

When asked about the cost of federal subsidies to ethanol, Johnson said that at a time of rising gasoline prices, they are still needed. “That’s a no brainer,” he said. And he said that there’s no relationship between rising food prices and increasing ethanol production.

Still, ethanol policy continues to draw criticism and scrutiny.

A Government Accountability Office study of potential waste from overlapping federal programs was released Tuesday. Among potential savings it outlined, “a range of options that could reduce federal revenue losses by up to $5.7 billion annually by addressing potentially duplicative policies designed to boost domestic ethanol production.”

The report, sought by Senator Tom Coburn (R-OK), questioned the need for continuing tax credits when the nation has an energy law that requires blending of ethanol.

On Wednesday, Johnson was also critical of last month’s House spending bill for attempting to cut nearly $1 billion in funding for nutrition programs for poor mothers and their children while maintaining subsidies for high income farmers.

“We need to limit ag subsidies to $250,000 per producer – which the House didn’t touch,” Johnson said.

Representative Jeff Flake (R-AZ) did introduce an amendment to do that, to prevent USDA from spending funds to make farm program payments “to a person or legal entity if the average adjusted gross income of the person or legal entity exceeds $250,000.” Flake’s amendment didn’t gain support and was withdrawn.

Most of the savings in the temporary spending bill passed by the Senate Wednesday comes from cuts to the Department of Education and from unspent earmarks. The bill was passed by the House on Tuesday and now goes to the President for his signature.

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