Making steady progress toward his goal of extending the ethanol tax incentive through the year 2007, Sen. Chuck Grassley of Iowa today shepherded extension of the ethanol tax incentive through the Senate Finance Committee.
Pro-ethanol legislation authored by Grassley and Sen. Carol Moseley-Braun of Illinois was included by the committee chairman, Sen. William Roth of Delaware, in the six-year, $145 billion highway funding bill approved this morning with strong bi-partisan support. The Finance Committee holds jurisdiction over the tax portion of the highway bill.
Grassley said the next step for ethanol will come next week when the full Senate is expected to begin consideration of the bill approved this morning by the committee. At the same time, Grassley said, there is ongoing debate regarding the time period that the highway bill passed this fall will cover. This morning, the House of Representatives broke with tradition when it passed a six-month version of a highway bill. Congress in recent years has provided funding for the nation's highway system with legislation that applies for five to six years into the future. The six-month House proposal does not include a tax title, so there is no ethanol provision.
Grassley said, "State governments must enter long-term contracts to build roads and bridges. To maximize the taxpayers' dollars, it's important for state highway departments to have as much information as possible about what the federal government's financial commitment will be. As a practical matter a short-term, six-month bill right now will probably lead to another six-month extension and subject highway dollars to election-year politicking. That's not the best environment for developing good public policy."
Grassley said the highway bill now moving through the Senate would provide certainty about the federal government's contribution to states for road and bridge construction, and it is written within the guidelines established for achieving a balanced federal budget by the year 2002. "In addition, the Senate-backed highway bill would give Iowa a 13 percent greater return on its federal gas tax dollars than we've been getting over the last five years," Grassley said. Specifically, Iowa would receive $36 million more each year for each of the six years in the plan.
Roth's formal endorsement of the ethanol extension in the Senate bill came last month in response to a formal request made Grassley, Moseley-Braun, Senate Republican Leader Trent Lott. The chairman included in the highway reauthorization tax amendment the exact Grassley/Moseley-Braun ethanol extension language that was overwhelmingly approved this summer by the Finance Committee during approval of the balanced budget plan.
There is "wide support for the extension from not only the Republican and Democratic Congressional leadership, but also President Clinton and Vice President Gore," Grassley said. In June, Finance Committee members voted 16 to four in favor of the Grassley/Moseley-Braun amendment to extend the ethanol incentive through the year 2007. The full Senate endorsed the extension one week later with a vote of 69 to 30 for ethanol. Yet, the ethanol extension was not in the final bi-partisan balanced budget approved by Congress and signed by the President in August. Under current law, the ethanol tax incentive is scheduled to expire at the end of the year 2000.
Grassley has stated repeatedly that he will continue to push for extension of the ethanol program. He has sought to bolster support for ethanol in the administration as well as on Capitol Hill. In August, Grassley took a call on his Northeast Iowa farm from President Bill Clinton to discuss ethanol, and he talked at length about the importance of the effort with Vice President Al Gore. Both Clinton and Gore endorsed Grassley's effort. Grassley also secured support this summer for an extension of ethanol's partial exemption from the highway excise tax from Senate Majority Leader Trent Lott and House Speaker Newt Gingrich.
"Extension of the incentive is key to continued investment in expanded ethanol production throughout the Midwest. It's good for farmers and jobs in rural America. It's good for the environment. And in terms of our fight against dependence on foreign energy, the ethanol tax incentive is a bargain," Grassley said.