CQ TODAY ONLINE NEWS
June 13, 2011 – 9:17 p.m.
Ethanol Vote Could Be Test for Tax Changes
By Sam Goldfarb, CQ Staff
With Congress embroiled in a debate over how to trim the budget deficit, even relatively minor votes on taxes can take on outsized political significance.
Casting a ballot on any tax issue, even a narrow one like ethanol subsidies, can serve as test case of congressional willingness, particularly on the part of Republicans, to use new revenues to chip away at the deficit.
An amendment offered by one of the Senate’s outspoken budget hawks, Republican
Although the amendment seems likely to fall short of the 60-vote threshold required for cloture, significant support for Tuesday’s scheduled cloture motion among GOP senators could signal an increased openness by Republicans to consider tax breaks as targets for deficit reduction.
That would bring them closer to Democrats who demand that revenue increases, and not just spending cuts, be included in a deal to raise the $14.3 trillion debt ceiling before Aug. 2.
At the same time, ethanol could be a special case, and Republicans who are willing to eliminate the much-criticized $5 billion annual “blenders” credit — which refiners get for blending ethanol with gasoline — may not necessarily be eager to touch other tax breaks.
For his part, Coburn has lent credence to the idea that Tuesday’s vote is about more than ethanol. “The days of placing spending programs in the tax code and giving them holy status are over,” Coburn said last week, shortly after taking the unusual step of filing as a minority member for cloture on the amendment, thereby forcing a vote.
Coburn and cosponsor
Both subsidies are scheduled to expire at the end of this year but have been consistently extended by Congress.
Battle Over Ethanol
Even before offering the amendment, Coburn was under fire from some conservative activists for publicly saying that he could support curbing tax breaks as part of a larger effort to bring the national debt down to sustainable levels.
By targeting ethanol subsidies specifically, Coburn has managed to win the backing of several prominent conservative organizations, including the Club for Growth, which advocates for low taxes and a less progressive income tax.
Barney Keller, a spokesman for the Club for Growth, said Monday that his organization usually supports eliminating tax breaks only if they are offset by equally large reductions in tax rates. But ethanol subsidies, he said, are “such an atrocious policy” that they “should be eliminated regardless of other changes in the tax code.”
Ethanol Vote Could Be Test for Tax Changes
In contrast, the conservative group Americans for Tax Reform has come out in opposition to Coburn’s amendment, saying it would violate a pledge against “net tax increases” signed by many Republicans, including Coburn.
Minority Whip
Kyl is the Senate Republican representative in the bipartisan group led by Vice President
House Majority Leader
Regardless of their broader views on tax policy, supporters of ethanol, Democrats and Republicans, are prepared to oppose Coburn’s amendment.
Coburn also could face some opposition from senators supportive of his amendment but concerned about the method that he used to force the floor vote on his measure. A Democratic aide confirmed that Democratic leaders, frustrated with the gambit, were calling on senators to oppose the cloture motion on procedural grounds.
New Bipartisan Bill
Anticipating Tuesday’s vote, two farm-state senators introduced legislation Monday that would scale back the largest and most controversial tax credit for ethanol but leave several other supports for the corn-based fuel unchanged.
The bill, co-written by
Critics of ethanol subsidies contend that they distort the free market and drive up food prices with no discernible environmental benefit. Supporters of ethanol argue that it helps lessen dependence on foreign oil and is an economic boon to farmers.
As pressure mounts to repeal ethanol subsidies, the Klobuchar-Thune bill is the latest concession from farm-state senators, following the recent introduction of a similar bill by
Ellyn Ferguson, Niels Lesniewski and Brian Friel contributed to this story.