Reid plans more ethanol votes next week

The battle over ethanol subsidies will resume in the Senate next week with more votes on proposals to strip or alter tax breaks that benefit renewable fuel producers.

The Senate on Tuesday rejected Sen. Tom Coburn’s (R-Okla.) amendment that would almost immediately end a major ethanol tax break.

Majority Leader Harry Reid (D-Nev.) said Tuesday afternoon that he’s planning a vote next week on ethanol incentives, and that Sen. Dianne Feinstein (D-Calif.) would take the lead for Democrats.

Feinstein, like Coburn, wants to kill billions of dollars worth of ethanol incentives that she calls costly and unneeded.

Precise plans for next week are uncertain. Sources on and off Capitol Hill said Tuesday that one option is to hold dueling votes on a Feinstein-Coburn bill to kill the incentives, and a separate plan floated Monday by Sens. John Thune (R-S.D.), Amy Klobuchar (D-Minn.) and other ethanol backers.

The Thune-Klobuchar plan would end the 45-cent per gallon ethanol blender’s credit (which is slated to expire at year’s end), but maintain a smaller and “variable” blender’s credit for three years when oil prices are below certain levels.

It would steer some savings from ending the credit to deficit reduction, while also extending credits for cellulosic ethanol production, small ethanol producers, and installing alternative fuel pumps.
Feinstein, on the floor Tuesday, also held out the option of working out a compromise plan with Thune and Klobuchar “that would be the best of all worlds.”

“Whether we can do this or not, I don’t know, but I am certainly willing to try,” Feinstein said.

She did not vote for the Coburn amendment earlier Tuesday – which received 40 votes when 60 were needed – despite her work with Coburn on identical legislation to kill the subsidies.

Feinstein said on the floor that she had urged Coburn to withdraw the amendment, which she ultimately voted against.

Coburn drew the wrath of Democratic leaders when he used a surprise procedural tactic last week to force the vote. “I believe if it weren’t for the process, we would have 60 votes,” Feinstein said.

With more votes looming, advocates on each side will have days to make their case. One opponent of ethanol industry tax breaks said there’s more support for ending the incentives than the Senate displayed Tuesday.

“Today's vote was distorted by procedural dynamics and not reflective of support for substance of the amendment,” said Stephen Brown, a top lobbyist and counsel for the Texas-based refining company Tesoro Corp.

“Next week's vote will be the real deal,” he said.

--Alexander Bolton contributed to this report.