The President called Grassley at his farm in Northeast Iowa on Saturday afternoon. During their telephone conversation, Grassley and Clinton made specific plans to craft a legislative strategy after Labor Day in order to win approval for extension of ethanol's partial exemption from the highway excise tax as part of the highway reauthorization bill.
Grassley also expressed frustration to Clinton on Saturday about the opportunity that was lost this summer to extend the ethanol tax incentive. "White House negotiators apparently did not understand that they held the power to tip the scales for ethanol in what otherwise was a deadlock between the Senate and the House. Instead, they accepted a compromise that left out the extension of the ethanol tax incentive I advanced with strong bi-partisan support in the Senate," Grassley said.
An amendment put forward in June by Grassley and Sen. Carol Moseley-Braun of Illinois won overwhelming bi-partisan approval from the Senate with a vote of 69 to 30. It also was endorsed by the White House in a July 3 letter from Treasury Secretary Robert Rubin to Congressional budget negotiators . The Grassley/Moseley-Braun amendment would have extended the ethanol tax incentive from the year 2000 to 2007.
The President's weekedn call came in response to repated efforts last week by Grassley to communicate directly to the President the importance of the White House "weighing in tough for the ethanol extension" during final negotiations on the balanced budget between Congressional leaders and Administration officials. In the end, White House negotiators accepted a compromise that Senate Republican negotiators had rejected days earlier because, Grassley said, "I had been assured that if the ethanol issue was left open as we proceeded to the official conference, that the White House and Democratic Congressional leaders would weigh in on the side of the ethanol extension."
The President is scheduled to sign today the balanced budget package approved in final form last week by both the House of Representatives and the Senate. The comprehensive plan contains neither the Grassley/Moseley-Braun ethanol extension nor the budget proposal advanced by House Ways and Means Committee Chairman Bill Archer of Texas that would have made it more difficult to extend the ethanol incentive after the year 2000.
In a letter to the President sent Monday afternoon, Grassley said he wanted "to underscore the importance of making certain that we all work more closely together, in a productive, bi-partisan way, to accomplish our mutual objectives of extending the very important ethanol program. Grassley said the President's leadership "will be crucial."
A long-time advocate for the expanded use of ethanol, Grassley wrote, "I also have received commitments from Speaker Gingrich and Senate Republican Leader Lott to help secure this ethanol extension, and I have been working closely with Senate Democratic Leader Daschle. In view of this strong support for ethanol from Republican and Democratic leaders, we will ultimately succeed." Grassley said the Congressional leaders with whom he spoke agree the highway bill is the next best opportunity for the ethanol extension.
Grassley and Moseley-Braun serve on the Senate Finance Committee, where they first won support in a 16 to 4 vote for their ethanol extension. The tax-writing committee holds jurisdiction over a major portion of the highway bill which Congress must reauthorize before the current law expires September 30. The President called for extension of the ethanol tax incentive through the year 2005 in the highway reauthorization bill he sent to Capitol Hill earlier this year.
"Ethanol is a fuel of the future," Grassley said. "It would be shortsighted for Congress and the Administration not to promote expanded use of clean-burning, domestically-produced, corn-based ethanol. We should encourage investment in and expanded use of ethanol because ethanol reduces America's costly dependence on foreign oil." Ethanol is expected in 1997 to create 195,200 jobs, increase net farm income by $4.5 billion, improve the U.S. trade balance by $2 billion, and add $450 million to state tax receipts.