Senators propose immediate end to ethanol credit (AP)

WASHINGTON – Two senators from ethanol-producing states are proposing to immediately end a tax credit for the corn-based fuel, agreeing to support shifting some of that money to debt reduction.

Sens. Amy Klobuchar of Minnesota and John Thune of South Dakota, along with ethanol opponent Sen. Dianne Feinstein of California, have proposed diverting $1.3 billion of the money remaining for the tax break this year to pay for debt reduction. And $668 million will be used for incentives for the ethanol and biofuels industries.

If accepted by the White House and the House, the compromise could provide a quick path to end the ethanol credit as part of budget negotiations between Congress and the White House. The Senate voted last month to end it, but the fate of that legislation is uncertain.