THE DEATH OF ETHANOL SUBSIDIES PASSES IN THE SENATE.

Good news! The bipartisan Senate bill sponsored by Sen. Diane Feinstein (D-CA) eliminating ethanol subsidies passed 73 to 27. Check out the Yeas and Nays, CLICK HERE.

The bad news is that the bill did not feature an ethanol tax credit for those producing the renewable fuel which means in the short term biofuel prices could rise since producers will cease making the corn-based fuel. Decreased supply + increased demand = increased price at the pump.

On the flip side, corn-based food prices should decreased due to increase supply.

Although some in D.C. aren’t thrilled about the passage of the bill. Grover Norquist with the Americans for Tax Reform “said a vote for the plan would violate the anti-tax pledge most Republicans have signed unless paired with a separate tax-cutting amendment.”

So voting to end subsidies for an industry is a tax since the price will rise? Seems logical. Coburn made this video statement on the Senate floor prior to the vote.

Andrew Stile writing for the Hill stated that “Coburn’s amendment eliminated tax breaks for the ethanol industry but did not include any offsetting tax cuts. The Joint Committee on Taxation estimated that his proposal would raise $2.4 billion in new tax revenue over the remainder of the year, which Coburn intended to put toward reducing the deficit. Norquist, therefore, denounced the amendment as a violation of the pledge.”

However, anti-spending hawk Sen. Tom Coburn says Norquist’s assertion is “ludicrous” and continued saying “[i]f you had $6 billion of an earmark in an appropriations bill that was going to the [ethanol] blenders and we took it away, no one would have ever said anything about taxes would they? But the fact that it came off the other side of the balance sheet as a tax credit, which is paid every month to blenders, everybody’s raising heck because we’re not offsetting a stupid tax credit.”

A statement released by Coburn’s spokesman continued to affirm the Senator’s pledge of cutting waste and spending while commenting on Norquist’s claim.

“Grover’s not well. Republicans put the Abramoff-Norquist earmark era behind them long ago, as Grover is just now realizing… He has become the Ted Stevens [the Alaska senator behind the infamous "Bridge-to-Nowhere"] of tax earmarks. If he keeps this up he’ll be a contestant on Dancing with the Stars.”

Quote Via: National Review Online.

Wow! Two anti-tax and anti-waste leaders are locked in a political mud slinging fight over whether eliminating a subsidy “is” or “isn’t” a tax. We could steal a Bill Clinton line about the definition of the word “is”, but we’ll leave it there. What a “corny” thing to fight over!?!