Ethanol Subsidies Squeezed Into Tax Cut Bill

[sasha031]

I don’t necessarily think ethanol subsidies is at the heart of Jim DeMint’s opposition to the tax cut deal – he just doesn’t believe in compromise. It probably doesn’t hurt, however, that a form of the ethanol subsidies are included in the deal
"The tax legislation that congressional Republicans and the White House have agreed to will include extensions of the biodiesel and ethanol subsidies through 2011, says Iowa. Charles Grassley, the ranking Republican on the Senate Finance Committee. The $1-a-gallon biodiesel subsidy, which lapsed at the end of 2009, would be retroactive to this year, he said.

Some leading Senate Democrats, including the chairman of the Senate Finance Committee, Max Baucus of Montana, indicated that the energy tax provisions were still to be worked out. “We’re going to have to wait the detail,” said North Dakota Sen. Kent Conrad, a member of the finance committee <...>

Grassley wasn’t sure if the tax agreement would extend the ethanol tax credit at its current level – 45 cents per gallon – or reduce it. Grassley said the subsidy should stay at 45 cents, but there have been proposals in the House and Senate this year to reduce it to 36 cents. Industry officials also were trying to confirm details today."

I’ve heard that the subsidy would go down to 36 cents. But the revival of the $1 biodiesel credit would be included as well, along with an 8 cent credit for small ethanol producers and a 54-cent ethanol tariff for imports.

I think this could lead to the belief that the bill has become a Christmas tree. Harry Reid’s push to legalize online poker in the bill adds to that as well. And nothing will take down this bill faster than cries of “pork” and “the cornhusker kickback” (in this case, actually having to do with corn).

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