Nelson & Rubio vote together to attempt to end three decade long subsidy for ethanol

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This giveaway to the industry, perpetuated by the power of Iowa in the presidential sweepstakes, has been ripe for repeal for a long time. Couple that with the unrelenting focus on trying to reduce the federal budget, and such a vote was a natural, though it won't become law just yet.


However, as Reuters reports, the Senate vote shows the odds are diminishing that the 45-cent-a-gallon subsidy the government gives refiners and the 54-cent-per-gallon tariff on imported ethanol — both targeted in Thursday's vote — will be extended at current rates beyond their scheduled expiration at the end of this year. The subsidy some say has also played a factor in increased food prices:


The Senate vote also comes as criticism mounts globally over subsidies for corn-based ethanol, blamed by some for raising food costs.


Last week, the World Bank and other international organizations called on governments to stop their ethanol subsidies because of concerns they were driving up food prices.


Senate Democrats would love to get Senator Rubio and his colleagues to join them now in pressing for a review of energy tax breaks as part of deficit reduction discussions, though the GOP has been stubbornly resistant so far for calls to end those subsidies.


Part of the problem is that Republicans, or most of them, seem ill prepared to take on noted anti taxi-guru Grover Norquist.


His group, American for Tax Reform has persuaded 40 of 47 Republican senators to sign his no-tax-increase pledge, regards the elimination of a tax break as a tax increase.

However, Americans for Tax Reform actually applauded yesterday's vote, but that comes with conditions. Those Senators, according to Norquist, must also vote for an amendment put out by South Carolina Republican Senator Jim DeMint, that repeals the "real policy distorting the energy market —the Renewable Fuel Standard (the mandate)—and eliminates the death tax."

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On the Senate floor Thursday, Florida's two U.S. Senators, Democrat Bill Nelson and Republican Marco Rubio, joined together in an overwhelming vote to kill the $6 billion annual federal subsidy for the corn ethanol industry.

This isn't the end of the subsidies, not yet. The House is expected to reject the vote and the White House opposes the measure. But the message is still fairly clear: the era of big taxpayer support for biofuels is ending.

As John McCain said, "This industry has been collecting corporate welfare for far, far too long."

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