Ethanol Tax Fight in Senate

Last week, Sen. Tom Coburn (R.-Okla.) forced a vote on an amendment that would have eliminated preferential tax provisions for ethanol in the tax code. The measure passed and has set off a feud between different coalitions in the conservative movement. The provision offended some conservatives, because it raises revenues without cutting other tax provisions to protect American companies and the American people from tax increases.

Sen. Coburn has been a warrior to eliminate waste, fraud and abuse. He has put out report after report to root out duplicative programs and government waste. He fought to eliminate funding to the infamous ???Bridge to Nowhere.??? He issued an excellent report with Sen. John McCain (R.-Ariz.), ???Summertime Blues,??? detailing the 100 most wasteful projects in the president???s ???stimulus??? plan.

Americans for Tax Reform President Grover Norquist, meanwhile, launched an effort to defeat the Coburn Amendment unless if it was paired with a revenue-neutral proposal by Sen. Jim DeMint (R.-S.C.) that offset the elimination of the tax break for ethanol and eliminated the death tax. Norquist feels that any elimination of tax breaks must be offset by tax reductions, otherwise there will effectively be a tax increase. ATR has a list of members who have signed the Tax Pledge that calls upon members to vote against any legislation that results in a net tax increase. Norquist works tirelessly to make sure that elites in the Nation???s Capital do not raise your taxes. Both Sen. Coburn and Grover Norquist make strong arguments.

Liberals are trying to spin the Coburn Amendment as evidence that Republicans want to eliminate all preferential tax provisions without any offset cuts as part of the debt-limit debate. This allegation is false.

There were two votes on the Coburn Amendment. The first was a procedural cloture vote to commence debate on the Coburn Amendment. An initial attempt at cloture failed 40 -59, with 60 votes needed. A second vote was forced on an identical amendment with the help of Sen. Dianne Feinstein (D.-Calif.). The amendment passed 73-27. Most Republicans voted for cloture and for final passage.

Many on the left are arguing that the fact that a large majority of Republicans voted to end debate and for final passage on this measure indicates that Republicans endorse the idea of repealing all corporate special-interest tax provisions without offsets. They are trying to get Republicans to sign onto the idea of massive tax hikes to be included in any debt-limit deal. Conservatives should oppose any debt limit deal that increases taxes???even with massive cuts to spending.

Czar Overload

House Republicans have drafted a financial services spending plan that would continue a prohibition on the Obama Administration???s loading up with czars for heath care, climate change and other positions in which they wield too much executive power. The appropriations measure also defunds aspects of a new so-called ???financial consumer protection agency.???

Conservatives worry that this new agency will become an out-of-control regulator of Wall Street. This effort is expected to die in the do-nothing Senate, yet it shows that conservatives in the House are fighting the ever-expanding powers sought by the Obama Administration to operate outside of congressional oversight.

Cut, Cap and Balance

The fight on the debt limit has been joined by a coalition of groups promoting a Cut, Cap and Balance pledge. The pledge is for citizens and members of Congress to promise that they will oppose a debt-limit increase until the following conditions are met:

Cut???Substantial cuts in spending that will reduce the deficit next year and thereafter.

Cap???Enforceable spending caps that will put federal spending on a path to a balanced budget.

Balance???Congressional passage of a Balanced Budget Amendment to the U.S. Constitution, but only if it includes both a spending limitation and a super-majority for raising taxes, in addition to balancing revenues and expenses.

This is a great pledge and there may be other excellent spending cuts or measures that should be put on the table. The American people have a constitutional right to participate in this very important debate over legislation to increase the debt limit over the current statutory cap of $14.3 trillion.