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Congress at Impasse Over Energy Policy

posted on October 31, 2003


Congress, as it does every year, is muddling through a backlog of unfinished spending bills. This week, lawmakers approved yet another extension to keep the government running while they try to resolve funding differences on everything from highways to farm subsidies. Though the new fiscal year already is a month old, only three of the 13 massive spending bills have been OK'd.

Conspicuous among the unresolved legislation is a new energy bill that's drawing the rapt attention of farm-state interests.

 

Congress at Impasse Over Energy Policy

Congressional stalemate persists on a major piece of legislation that will have a far-reaching impact on Rural America. Indeed, talks on a broad blueprint for the nation's energy policy are at an impasse over proposed ethanol taxes.

Debate on the energy bill has dragged on for three years now and currently stands in conference committee. There, lawmakers are considering a provision that would double the use of corn-based ethanol as a gasoline additive to five billion gallons a year by 2012. The measure has widespread political appeal and is the main reason many farm-state senators have pledged support for the energy bill.

But the legislation is at risk because of a standoff between the principal tax writers in the House and the Senate, Republicans Bill Thomas of California and Chuck Grassley of Iowa.

On the Senate side, Grassley is concerned about a loss of revenue for the federal highway trust fund if increased ethanol consumption occurs. That fund, which is used for construction of roads, currently is financed solely by gasoline taxes. To offset a presumed loss in gasoline tax when ethanol usage increases, Grassley wants the legislation to include a provision that would shift ethanol tax monies to the highway trust fund. In the House, Thomas opposes that idea. He argues that issue should be taken up next February when Congress debates renewal of the highway fund.

Grassley has begun pressuring the White House to lean on Thomas. He cites a Congressional Budget Office study which concludes that without his proposal, the road fund will lose $4 billion over 10 years.

Matters are further complicated by some senators, who have threatened to walk away from the legislation without assurances that highway money will be protected as part of the ethanol tax.

 


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