Senate Republicans block finance bill extending wind, solar, biodiesel incentives

By a vote of 50-44, the US Senate failed to invoke cloture and end Republican opposition to a $120 billion bill that extends the research and development credit and incentives for wind, solar, biodiesel, and clean-coal. Senate Republicans said they opposed a $1.6 billion tax break for trial lawyers in the bill, plus an unfinanced provision for the alternative minimum tax. With debate not closed, the bill cannot proceed to a floor vote in the Senate although Senate Finance Chairman Max Baucus of Montana said that he expected to have enough votes within ten days to invoke cloture and send the bill to the Senate for a vote.

Senate background

Last week, observers said that a bill introduced by Senators Dianne Feinstein (D-CA) and Judd Gregg, (R-NH), to reduce the ethanol tariff from 54 cents to 45 cents is doomed. The bill, which is now in the Senate Finance Committee, is opposed by both committee chairman Max Baucus (D-MT) and ranking Republican Chuck Grassley (D-IA). Aides said that the Finance Committee, in addition, does not typically fast-track bills proposed by Senators outside of the committee, and there is not enough time on the normal legislative clock to pass major new energy legislation this year.

Also last week, the Republican leadership mustered sufficient votes to defeat the Warner-Lieberman climate bill, according to sources on both sides of the aisle. Following an extraordinary motion to read the 492-page bill, which took 8-1/2 hours, key Senate Democratic supporter Barbara Boxer of California said that the bill did not have the 60 votes needed to overcome further procedural roadblocks set by Republicans. Republicans says that the cost of the bill is too high, and President Bush has promised to veto the bill in its current form. The legislation requires electric plants and factories to reduce CO2 emissions by 71 percent on s schedule that commences in 2012. The bill would put a cap-and-trade carbon system in pace in the US for the first time.

Last month, the Senate voted 82-13 to override a veto by President George W. Bush and enact the Farm Bill into law.

Questions emerged over what exactly was voted on after it was discovered that the original bill passed by the US House, due to a clerical error, was sent to the White House with a section missing on trade policy. A minority of House members said that the legislation would have to be re-approved, re-sent to the White House, re-vetoed, and then the US House and Senate would have to revote to override.

House and Senate leaders said, however, that the 14 of the 15 titles in the bill did not have to be reconsidered. House Speaker Nancy Pelosi accepted responsibility for the oversight by House staff.

The bill contained a historic two-tiered ethanol incentive, with corn ethanol subsidies dropping to $0.45 per gallon and a new $1.01 subsidy introduced for cellulosic fuels. A last minute amendment had changed the language of the higher subsidy from “cellulosic ethanol” to “cellulosic fuels”, which otherwise would have exempted companies such as LS9 and Gevo.

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