Norquist’s group steers clear of new ethanol fight – for now

But the Senate – with the support of 33 Republicans – voted for the Feinstein amendment. The vote was a setback for ATR, even though the amendment was attached to a bill that eventually collapsed.

Now, Feinstein is floating a compromise plan with two pro-ethanol senators – John ThuneJohn Randolph ThuneOvernight Tech: Senate panel subpoenaed ex-Yahoo chief | Twitter gives all users 280 characters | FBI can't access Texas shooter's phone | EU wants tax answers from Apple Overnight Cybersecurity: What we learned from Carter Page's House Intel testimony | House to mark up foreign intel reform law | FBI can't access Texas shooter's phone | Sessions to testify at hearing amid Russia scrutiny Former Yahoo CEO subpoenaed to appear before Congress MORE (R-S.D.) and Amy KlobucharAmy Jean KlobucharReported pressure on CNN in Time Warner merger raises retaliation fears Dem sens demand answers over reports DOJ wanted CNN sold Ted Cruz, Debbie Dingell help Chuck Todd celebrate 70 years of 'Meet the Press' MORE (D-Minn.) – that would kill the ethanol blenders’ credit, but extend credits for producing next-wave cellulosic fuels and installing ethanol pumps at gas stations.

The plan, which also extends a credit for small biofuel producers, brings in more money than it costs, the senators say.

Ending the multibillion-dollar blenders’ credit in late July would save $2 billion this year, according to the senators, whose plan would steer $1.33 billion into deficit-reduction and the balance (about $670 million) into paying for extending the other incentives.

The proposal would appear to violate the ATR pledge because it dedicates revenue to reducing the deficit instead of applying it all to cutting taxes.

It is unclear if the Thune-Klobuchar-Feinstein agreement will make it into a deal to raise the debt ceiling.

Republican leaders in the House and Senate have, by and large, echoed ATR in saying they are open to eradicating tax loopholes but only if that revenue is used to cut taxes. Thune, however, is part of the Senate GOP leadership team.

The Joint Committee on Taxation has scored all aspects of their plan except what the lawmakers say would be the $308 million cost of extending cellulosic ethanol production credits for three years, according to Feinstein’s office.