Senate votes to scrap ethanol subsidy
June 16th, 2011
02:52 PM ET
3 years ago

Senate votes to scrap ethanol subsidy

(CNN) – The Senate Thursday approved a measure scrapping a controversial $6 billion annual subsidy for the ethanol industry.

The lopsided tally was 73 to 27, marking the first time a supermajority of senators voted to do away with the special tax break, originally designed to bolster the nascent bio-fuels industry but now considered by many on Capitol Hill to be an unwarranted taxpayer expense.

The vote does not necessarily mean the subsidy will disappear right away. For one thing, it was adopted as an amendment to an unrelated bill that is unlikely to ever become law. However, because it crossed the coveted 60 vote threshold –the number needed to break a filibuster– it sends a strong signal that the tide has turned against continued taxpayer support for the industry.

The special tax break is due to expire at the end of the year. This legislation would end it by July 1st, saving taxpayers about $3 billion, according to the bill's supporters.


Filed under: Energy • Senate
soundoff (37 Responses)
  1. Jimmy

    Why stop this subsidy before we end even bigger subsidies to individuals. Republicans need to make good on their promise to end Medicare and reduce social secuity.

    June 16, 2011 03:56 pm at 3:56 pm |
  2. Chas in Iowa

    I'm glad reality has finally prevailed.
    The entire ethinol industry has been a shamm from day one. Don't get me wrong, it is a good idea but the science has not caught up to the idea. Ethanol takes 9/10 of a gallon of energy to produce 1 gallon og ethanol. 90%b of the cost of the product is the energy to produce it. The total cost of manufacture and the corn has to be absorbed into the 10% left over. At todays market that says that the corn and the fuel and time to plant and harvest the corn, transport it to the refinery and handling has to be done at a rate of $.37 a gallon. It takes 1 bushel of corn to get 2.4 gallons of ethanol. At 7.00 a bushel the cost of the raw product is @ $2.91 for a loss of $2.54 per gallon without figuring the cost of production of the corn or the ethanol. The numbers just don't justify the waste of corn or our taxpayer dollars.

    June 16, 2011 04:01 pm at 4:01 pm |
  3. Dreamer96

    I don't know they are cuuting expenses, or if big oil pushed this, or they were worried about food shortages, or they think it is time for ethanol to stand on it's own, (which it might not be able to do now, just as E85 cars a finnally here), or they want to push for algae bio fuel, which would be much better anyway.

    Aglae can make oil, diesel, and gasoline. Could be built to feed off the CO2 of our coal, natural gas power plants and thereby reduce the plants CO2 output. Algae an be harvested in weeks, sent right to refineries, but is going to require money to get it going.

    I do know they disappointed the corn growers. To balance our budget we are going to disappoint people, just do it fairly.

    June 16, 2011 04:06 pm at 4:06 pm |
  4. at

    It's about time to stop that and all other AG subsides. Far right allways spouting about freemarkets, about time to make AG a freemarket.

    June 16, 2011 04:09 pm at 4:09 pm |
  5. Democrat Class Warfare - Destroying the economy, destroying the country

    How about banning ethanol from gasoline? A total waste and a liberal farce from the start.

    June 16, 2011 04:09 pm at 4:09 pm |
  6. Chris - Denver

    And yet they don't scrap the subsidy to the hugely profitable oil industry? Talk about an "unwarranted taxpayer expense." Sheesh!

    June 16, 2011 04:17 pm at 4:17 pm |
  7. gwen

    But we continue to give big subsidies to oil companies.... hmmmmm.

    June 16, 2011 04:20 pm at 4:20 pm |
  8. Northborough Dan

    Excellent. Tax loopholes like this are subsidies and given the deficit, we need a lot of these subsidies to go away.

    Please CNN and all other media, can we start talking about real issues like this and just get beyond Weiner-gate?

    June 16, 2011 04:30 pm at 4:30 pm |
  9. FRANK - LAS VEGAS

    Now if they could do the same thing to the oil company subsidy. I bet they won't though, the oil companies have many more senators on their payroll (on the take).

    June 16, 2011 04:34 pm at 4:34 pm |
  10. Switters

    What about all the other "farm subsidies" – billions paid every year to large corporate farming interests – what about a little "free market" in the ag bus........

    June 16, 2011 04:40 pm at 4:40 pm |
  11. Tony

    OMG and they chose to throw our money down the toilet called the oil industry.
    I guess the ethonal industry doesn't have enough money to buy their votes.
    Congress makes me sick.

    June 16, 2011 04:43 pm at 4:43 pm |
  12. The Real Tom Paine

    Alert Grover Norquist:

    Tax increase! Who broke the pledge?

    Its about time they did away with this boondoggle. Now, can someone explain to me why the oil companies still get subsidies? I wonder if Tom Coburn will vote in favor of disposing of those?

    June 16, 2011 04:51 pm at 4:51 pm |
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