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Ethanol Subsidy May Split Senate Republicans

Tom Williams/Roll Call
Sen. Tom Coburn and other Republicans focused on cutting federal spending are targeting an ethanol subsidy.

In a March 27 opinion piece in the Washington Examiner, Coburn described the subsidy as “nothing more than corporate welfare not-so-cleverly disguised as a tax break.” On Tuesday, he threatened to do everything in his power to derail the small-business bill until he was allowed a vote on his amendment.

“This is hard ball,” the Oklahoma Republican said. “They know it. And I’m not going to agree to any unanimous consent on anything, and this is the Senate. So they’re going to vote on it one way or another.”

But even if Coburn manages to force Senators to weigh in on his proposal, he would be hard pressed to muster the 60 votes he almost certainly would need to end the subsidy, which is set to expire at the end of the year. Farm-state Democrats — including North Dakota Sen. Kent Conrad, chairman of the Budget Committee and Illinois Sen. Dick Durbin, the Majority Whip ­— support the ethanol subsidy, as do Republicans from corn-producing states.

Grassley, who fought to protect ethanol subsidies as the top Republican on the Finance Committee until he was term-limited out of that position at the start of the 112th Congress, said it was wrong to single out ethanol without examining other energy subsidies given to oil and gas and renewables.

“It isn’t a question of whether you ought to have more or less ethanol subsidy at this point,” he said. “This ought to be considered in the context of national energy policy. It ought to be brought up when we are talking about energy, not when you’re talking about a small-business bill.”

Other GOP Senators said they too would fight to keep the subsidy in place, at least for now.

Sen. Mike Johanns, who served as Agriculture secretary under President George W. Bush, said he opposed isolating ethanol.

“Taking one piece out and saying, ‘We’re going to attack this,’ I think is the wrong strategy,” the Nebraska Republican said. “I really believe you have to put it together in one big effort because you pick out these things one at a time, eventually you’ll just get nowhere.”

Freshman Sen. Mark Kirk said eliminating the ethanol subsidy would have “a tremendous impact on the central and southern Illinois economy” and that he could only consider supporting a cut to the federal subsidy if it was part of broader, across-the-board spending cuts.

 “All federal accounts should be cut in general to reduce the common danger of the deficit, but some sort of unique singling out should not be done,” the Illinois Republican said.

The proposal even divides members of the GOP leadership, with Minority Whip Jon Kyl (Ariz.) among the supporters of doing away with the subsidy and Republican Policy Committee Chairman John Thune (S.D.) among those who are arguing to keep it in place.

“I think that the issue of economic certainty and — when you put policies in place — at least leaving them there until the end of the year when the current law would expire — makes a lot of sense,” Thune said. “We can’t put businesses in the position of trying to plan and then pulling the rug out from under them as this would do.”

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