Report: Tax Deal Revives Ethanol Subsidies

It isn’t being reported, but Iowa Senator Charles Grassley is telling his constituents that the deal that extends the Bush tax cuts includes a revival of one of the more wasteful subsidies in the Federal budget:

The tax legislation that congressional Republicans and the White House have agreed to will include extensions of the biodiesel and ethanol subsidies through 2011, says  Iowa. Charles Grassley, the ranking Republican on the Senate Finance Committee. The $1-a-gallon biodiesel subsidy, which lapsed at the end of 2009, would be retroactive to this year, he said.

Some leading Senate Democrats, including the chairman of the Senate Finance Committee, Max Baucus of Montana, indicated that the energy tax provisions were still to be worked out. “We’re going to have to wait the detail,” said North Dakota Sen. Kent Conrad, a member of the finance committee.

If Congress does extend the biofuels subsidies temporarily, lawmakers will have to decide what to do with them again next year.

Of course, with the Presidential election year I think it’s pretty clear what will happen.

H/T: Virginia Virtucon

FILED UNDER: Quick Takes, US Politics
Doug Mataconis
About Doug Mataconis
Doug Mataconis held a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010 and contributed a staggering 16,483 posts before his retirement in January 2020. He passed far too young in July 2021.


  1. john personna says:


  2. PD Shaw says:

    Now this is how you run a lame duck session before a party turnover. Big Corn took a hit this last election, so it’s time to cash in what chits you have.

  3. michael reynolds says:

    Ethanol: the One Ring of subsidies. We’re going to need a midget to carry it to Mount Doom.