Ethanol subsidy and tariff to be extended

Congressional lawmakers have reached an agreement to extend the 45 cents per gallon subsidy for ethanol for one year and continue a tariff on the imports of the biofuel. The tariff will remain at 54 cents per gallon through 2011, said Iowa Republican Sen. Chuck Grassley. The provisions would be included in tax legislation worked out with the White House, Philip Brasher of the Des Moines Register reports. "The bill also would resurrect and extend for another year the $1-a-gallon subsidy for biodiesel that expired at the end of 2009," Brasher writes.

Grassley on Thursday announced the provisions would be included in the tax bill but the level of each provision was still uncertain. "The ethanol subsidy and tariff were due to expire at the end of this month," Brasher writes. Extending these provisions "will boost jobs and investment in the alternative energy sector, exactly when the economy needs a real shot in the arm," Grassley said. Critics of the growing federal deficit had targeted the subsidy and tariff as a move to cut deficit spending. (Read more)