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Senate vote saves ethanol tax breaks

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The Senate on Tuesday voted against killing off $6 billion in tax breaks for ethanol producers in a vote highlighting the power of anti-tax groups, The Hill reported.

The measure was backed by Sen. Tom Coburn, a fiscally conservative Republican from Oklahoma regarded as a deficit hawk, but he was unable to martial the 60 votes needed to end debate in the Senate. The procedural vote failed, 40-59.

The debate and the vote broke down largely along geographic lines, with farm-state Republicans who support the ethanol industry voting against the amendment and Republicans from states without major corn-growing interests voting for it.

Republican Sens. John Thune of South Dakota, Mike Johanns of Nebraska and Charles Grassley of Iowa, for example, all spoke out against Coburn’s proposal in comments on the floor. They argued that the amendment, if approved, could raise fuel prices.

“Why would anyone prefer less energy production?” Grassley asked. “We should all be on the same side of more domestic-produced energy.”

Americans for Tax Reform (ATR), a group led by conservative stalwart Grover Norquist, lobbied against the amendment on the grounds that the elimination of any tax break, including those seen as corporate subsidies, should only be eliminated if it is offset with tax cuts. Without such an offset, Norquist and ATR viewed Coburn’s measure as a tax increase and a violation of the Taxpayer Protection Pledge signed by many lawmakers.

Republicans who supported the amendment argued the country could no longer afford the cost of the ethanol tax credits.

Democratic leaders have called for another vote on the issue by the end of next week.

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