US Senate votes down ethanol subsidies

In a 73-27 vote, the Senate approved an amendment to end a 45 cent per gallon credit given for blending ethanol into gasoline and scrap a hefty tariff on ethanol imports.

The outcome for the measure remains uncertain, since the broader bill would need to pass the Senate and the House of Representatives, but lawmakers said a broad coalition supports the move to help curb the massive budget deficit.

"The ethanol and oil industries do not need nor do they deserve subsidies that are costly to American taxpayers, harm our environment and increase the cost of the food we eat," said Senator Ben Cardin, a Maryland Democrat who was among the 38 Democrats, 33 Republicans and two independents voting in favor.

The Renewable Fuels Association, which represents the ethanol industry, said it was "disappointed in the shortsightedness of this vote" but added: "As the underlying bill to which this amendment is attached is unlikely to make it to the president's desk, this vote was a freebie with no real consequences."

Critics say ethanol, made mainly from corn in the United States, has diverted too much grain from food to fuel, and has done little to ease greenhouse gas emissions.

A coalition including Tea Party activists and a range of environmental and community groups have been urging lawmakers to scrap the subsidy.

Agriculture Secretary Tom Vilsack urged lawmakers to continue the subsidy to help reduce dependence on oil until newer biofuels come into service.

"President (Barack) Obama has outlined a plan to reduce our oil imports by one-third by 2025," Vilsack said.

"Biofuels play a central role in this plan, which is why this administration continues to support and invest in the development of these important, domestically produced fuels... today's amendments are not reforms and are ill advised. They could lead to job loss and pull the rug out from under industry, which will lead to less choice for consumers and greater dependence on foreign oil."

(c) 2011 AFP