Jun 16 2011

An Ethanol Miracle - The Wall Street Journal

A Senate supermajority turns against King Corn.

Loaves and fishes. Water into wine. Healing lepers. And yesterday, the Senate voted to end ethanol's purchase on the federal Treasury.

The 73-27 vote on an amendment sponsored by California Democrat Dianne Feinstein—33 Republicans, 38 Democrats and both independents in favor—was the kind of supermajority that usually waves through new subsidies for the fuel made from blending corn and tax dollars. Ending the annual $6 billion subsidy, along with the tariff on foreign ethanol, marks the first time in memory that the ethanol lobby has lost a major vote, as the left-right coalition that wants to eliminate its subsidies and mandates continues to grow.

For now, this victory for energy and fiscal sanity is incomplete, because the underlying bill—a new engine for green subsidies—is unlikely to pass the Senate, let alone the House. Still, ethanol's decades on the public dole appear to be numbered. The 27 "nays" were essentially the Farm Belt contingent, with the disappointing addition of Ohio Republican Rob Portman.

The House also voted yesterday, 283-128, to bar public spending on the special blender pumps and tanks necessary for higher concentrations of ethanol. This is significant because the ethanol lobby has been counting on the pump and tank subsidy to replace the tax credits and tariffs. The Senate defeated a similar amendment from John McCain yesterday, so House Members will need to be on the lookout for this to appear at 3 a.m. in some "must have" legislation.

Washington's spending and debt habits have put the country on a road to ruin, but one benefit is that the crisis is forcing the political class to finally prioritize among its boondoggles. We don't want to sound too optimistic, but if we were ethanol lobbyists, we'd be updating our resumes and sending them to the electric car lobby, just to be safe.