By a vote of 69 to 30, the U.S. Senate turned back an effort by Sen. John McCain of Arizona to strike the provision Grassley won last week by a vote of 16 to 4 during Finance Committee consideration of the Tax Fairness Act. The Grassley amendment which this afternoon won the endorsement of the full Senate would extend the highway tax exemption for ethanol to the year 2007. Current law maintains the ethanol incentive through the year 2000. President Bill Clinton has called for its extension to the year 2005.
"Today's vote sends a message that not only does the U.S. Senate support the current ethanol tax incentive, but the U.S. Senate wants to extend the ethanol incentive well into the next century. Ethanol clearly is an alternative fuel of the future, and I look forward to making the case during conference negotiations on this major tax relief bill," Grassley said.
Following passage of today's comprehensive tax relief bill, Senate negotiators must reconcile the bill with that approved earlier this week by the House of Representatives. The House bill maintains the ethanol tax incentive through the year 2000.
"Extension of the ethanol incentive is essential to continued investment in expanded ethanol production throughout the Midwest," Grassley said. "Ethanol is good for the environment, the rural economy and it helps reduce America's dependence on foreign oil." In fact, ethanol is credited with creating 195,200 jobs, increasing net farm income by $4.5 billion, improving the U.S. trade balance by $2 billion, and adding more than $450 million to state tax receipts.
Grassley serves as the third most senior member of the Senate Finance Committee, which maintains jurisdiction over all tax issues.