Ethanol Subsidy Gets
Boost From Gingrich

WASHINGTON —(AP)— The biggest obstacle to extension of tax breaks for corn-based ethanol was removed last week by House Speaker Newt Gingrich, all but ensuring the subsidy will continue through 2007.

Gingrich, R-Ga., decided not to appoint the highest-ranking opponent of the subsidy — Ways and Means Committee Chairman Bill Archer, R-Texas — to a conference committee that will negotiate a compromise on a major transportation bill.

That means, Archer said, "a decision has been made to stack the deck" to ensure the tax break remains in the bill.

"The sole purpose of this decision is to extend the subsidy for ethanol well beyond its scheduled termination date," Archer said in a statement today. "Politics will triumph over policy."

Gingrich appointed Reps. Jim Nussle, R-Iowa, and Kenny Hulshof, R-Mo., to the House-Senate conference committee on the transportation bill. Both are ethanol supporters and will replace Archer and Rep. Philip Crane, R-Ill.

Archer announced that because of this decision, he will oppose the massive highway bill.

The 5.4-cents-a-gallon tax break given to marketers of gasoline that blend gas with ethanol is scheduled to end in 2000 under current law. The Senate version of the highway bill, however, would extend the tax break until 2007.

The Clinton administration, Senate Majority Leader Trent Lott, R-Miss., and Gingrich all supported the extension, which is popular with corn farmers and a key issue in Iowa, site of the first presidential caucuses in the 2000 race.

Supporters say the ethanol-gas blend is better for the environment and could help reduce foreign oil dependence.

But Archer, of oil-rich Texas, has steadfastly opposed the tax break, which he estimated at $600 million a year and one that primarily benefits one company — agricultural conglomerate Archer Daniels Midland Co. of Decatur, Ill.

Archer had offered to compromise on an extension through half of 2003, but that was overruled by Gingrich in a House Republican meeting, Ways and Means Committee spokesman Ari Fleischer said.