The Senate moved to end tax credits for ethanol producers yesterday, a largely symbolic move that nonetheless reflects a growing will to reconsider a formerly sacrosanct government subsidy.
The 73-to-27 vote approved an amendment attached to the Economic Development and Revitalization Act, a measure that is unlikely to make it through the Senate. But the move to eliminate ethanol subsidies that sacrifice around $6 billion annually in tax revenue was significant for the wide margin of victory and bipartisan support. Republican backing signaled that the GOP is willing to look for revenue by repealing tax breaks, a practice that the party typically derides as another type of tax hike.
I think the days of large subsidies like this are really over, and this is kind of the first vote on it, said Sen. Dianne Feinstein (D-CA), who sponsored the amendment with Sen. Tom Coburn (R-OK). I think you're going to see all kinds of subsidies go, because we've got so many problems.
According to a recent Government Accountability Office report, the price of ethanol subsidies could rise to $6.5 billion by 2015 if left unchecked. Ethanol tax breaks are prized by Midwestern farm state lawmakers, who argue that the measure supports American business and bolsters an alternative to foreign energy. It is also an issue that usually factors into a presidential run, given that the crucial early Iowa caucus takes place in a state that is a lead ethanol producer -- Republican presidential hopeful Jon Huntsman has alienated members of Iowa's political establishment for his stand against ethanol subsidies, which he said artificially prop up corn, soybeans and ethanol.
The House joined the Senate in slicing government support for agriculture, voting 217 to 203 to pare back funding for a program that provides food to impoverished women and children and another, Food for Peace, that helps to feed poor people in other countries. Democrats argued against such reductions, saying they would force the programs to turn away people struggling to get enough nutrition.
Everyday people across the country leave their homes in search of work, only to return at the end of the day with more worries and less hope, Rep. Sam Farr (D-CA) said during debate. At a time that people continue to struggle to make ends meet, Republicans want to cut funding to food programs that are helping put food on the tables of those most in need.