Under an agreement announced by Sens. Dianne Feinstein, D-Calif., John Thune, R-S.D. and Amy Klobuchar, D-Minn., the ethanol tax credit would expire July 31 instead of Dec. 31, producing a savings of roughly $2 billion, the Minnesota Star Tribune reported Thursday.
However, in a compromise, not all of the saving will go for deficit reduction; $668 million is to be allocated to support other renewable energy efforts such as plug-ins for electric cars, natural gas development and efforts to produce ethanol from sources other than corn.
The credit granted ethanol refiners had helped support a $3 billion industry in Minnesota.
Minnesota's Klobuchar, who co-authored three other pieces of legislation that would have phased out the credit over four or five years, said in the end a compromise was inevitable.
The $668 million for other renewable fuel efforts is $300 million less than what she sought, she said.
"We had $1 billion going for deficit reduction [and $1 billion going for renewable energy initiatives]," Klobuchar said, calling the compromise a "shared sacrifice."
"Do I think we're going to have to explain it to people?" Klobuchar asked. "Yes, because it was so complicated. But was that a reason to walk away from it and just let the tax credit end? No. It was the best thing to do for our state and for our country."
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