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Senate Dem Leadership Whipping Against Ethanol Subsidy Repeal on “Procedural” Grounds

Tom Coburn’s big vote in the Senate on repealing $5 billion a year in ethanol subsidies is today, one that has support from both the Club for Growth and the Sierra Club. In fact, even the Koch Brothers – the KOCH BROTHERS! – support repeal.

“Koch Industries has opposed federal mandates and subsidies for decades,” the letter to Coburn reads. “Our aim is to create a free market where consumers decide winners and losers based on which products they decide to buy, instead of government picking winners and losers based on which friends or products it chooses to subsidize. One such government intervention is the tax credit that provides about $6 billion each year to blenders of ethanol.”

“We hold this position despite the fact that we benefit from these tax credits,” the letter points out.

So, environmentalists want to get rid of ethanol subsidies because corn-based ethanol costs more in energy to harvest than it saves in oil emissions, the world community thinks biofuels raise the price of food and don’t lower energy use, even recipients of the subsidies think it’s time for them to go. So of course, Senate Democrats want to defeat the amendment. But on procedural grounds, you see. They don’t like the way Coburn forced a vote.

A Democratic aide said the opposition to the Coburn amendment is “on procedural grounds.”

“Coburn doesn’t run the Senate,” the aide said.

Other aides confirmed that leadership is whipping against Coburn’s amendment, which would need 60 votes to advance in a test vote scheduled for Tuesday.

In many ways this is a moot point, because the underlying bill that Coburn wants to attach his amendment to won’t pass. But a positive vote on something that will save the country over $50 billion inside the budget window would be attractive as a component of a debt limit deal, even if Eric Cantor wants to keep it outside those talks.

But because the Senate leadership doesn’t like how the amendment got to a vote, they’re whipping against it. Somehow I think that’s an excuse. The Department of Agriculture, led by Iowa’s own Tom Vilsack, wants to keep the tax credit. And the Dems in the Senate are falling in line.

Incidentally, there’s already a mandated market for renewable fuels in the form of a federal law that requires 36 billion gallons of biofuels by 2022. That would force production to remain quite high and make biofuels producers rich. The tax credit has outlived its usefulness as an incentive to a market which is already strong and designed to grow. Maybe corn-based ethanol would lose out with just a mandate, but that’s a good thing for the planet.

But somebody high up wants that money to keep coming. And they don’t want to give Coburn an avenue to stop it. So we have this whipping against an environmental initiative on “procedural” grounds.

It does seem like Ag subsidies generally will be reduced this year. But the ethanol subsidies seem to have an important champion somewhere.

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David Dayen

David Dayen