Senate shoots down proposal to end ethanol subsidies

Earlier today, the United States Senate rejected an amendment that would have put an end to the $6 billion in tax breaks and subsidies for producers of corn-based ethanol.

Introduced by Senator Tom Coburn (R-Oklahoma), the amendment was unable to martial the 60 votes needed to end debate in the Senate, failing in a 40-in-favor, 59-against procedural vote as members of both parties joined in opposition to the measure.

Coburn, considered by most as a conservative Republican, framed the elimination of ethanol subsidies as a way to slash the nation's deficit. Coburn stated:
Eliminating the ethanol tax earmark and tariff would be a big step toward restoring fiscal sanity in Washington. Ethanol is bad economic policy, bad energy policy and bad environmental policy.
On Coburn's side were environmental advocates who have long questioned the ecological benefit of ethanol, claiming that it simply takes too much energy to produce the corn-based fuel.

In opposition stood the Americans for Tax Reform (ATR), a group headed by conservative Grover Norquist. The ATR lobbied against the amendment on grounds that the elimination of a tax break should only be considered if it's offset by tax cuts.

The federal ethanol tax subsidy, currently at 45 cents a gallon, is set to expire on December 31, 2011. This failed amendment would have put an end to the subsidy almost immediately.

[Sources: Reuters, CNN Money, Huffington Post | Image: Kevin Briody – C.C. License 2.0]

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