Effort to End Tax Credit for Ethanol Fails in Senate

By CARL HULSE
NYT

WASHINGTON — The Senate beat back a challenge to ethanol fuel subsidies on Tuesday in a demonstration of how the drive to cut the federal deficit can run headlong into a favored interest on Capitol Hill.

At the same time, Vice President Joseph R. Biden Jr. expressed confidence about bipartisan talks aimed at producing a budget deal that would clear the way this summer for an increase in the federal debt ceiling. He predicted that lawmakers would have a proposal for “beyond $1 trillion” in savings by the Fourth of July recess.

“We are down to the really hard stuff,” Mr. Biden told reporters after the first of three meetings of the negotiators this week.

On the ethanol subsidy, critics wanted to eliminate, as of July 1, the 45-cent-per-gallon tax credit offered to refiners for using the corn-based fuel at an estimated cost of nearly $6 billion a year. The 59-to-40 vote on Tuesday to advance the measure was 20 votes short of what was needed.

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