Corn-Ethanol U.S. Tax Credit Part of Tax Package, Senators Say

Credits for blending ethanol with gasoline are included in the package of tax breaks being negotiated in Congress, Democratic Senators Ben Nelson and Dianne Feinstein said.

Extending the credit is supported by producers of corn- based ethanol and lawmakers from Midwest farm states who said jobs would be lost unless the benefit continued. Critics said the credit should expire as scheduled, citing the effect on the deficit and a help ethanol producers get from a U.S. requirement that refiners blend a set amount of ethanol each year.

The tax break is set at 45 cents a gallon produced. Feinstein, a California Democrat, said she thought the credit was included at that level as part of the tax deal, which would also extend Bush-era income-tax breaks.

“As far as I know, they’re in,” said Feinstein, an opponent of extending the credit.

Nelson, a Nebraska Democrat who supports the extension, said he had also been told the ethanol credit will be in the package.

A five-year extension would cost about $31 billion, according to a letter sent by 17 Senate Democrats and Republicans, including Feinstein, to congressional leaders on Nov. 30 opposing the credit.

Matt Hartwig, a spokesman for the Renewable Fuels Association in Washington, said an extension provides ethanol companies “breathing room” to debate the subsidies in the Congress that convenes next month.

To contact the reporter on this story: Jim Snyder in Washington at

To contact the editor responsible for this story: Larry Liebert at

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