One day after a majority of Republicans voted to do away with ethanol subsidies, the Senate’s No. 3 Republican said Wednesday that he is working on legislation that could eliminate a variety of energy tax subsidies and dedicate the proceeds to debt reduction.
The move by Sen. Lamar Alexander (R-Tenn.) is the latest sign of a break within the ranks of the GOP, which has for at least two decades strongly opposed raising taxes by any means other than economic growth. Tuesday’s ethanol vote, while unsuccessful, garnered the support of 34 of 47 Senate Republicans.
“Permanent subsidies for mature technologies, to me, are inappropriate, so we’re looking over those carefully, and I expect that before long I’ll have legislation that will look at all energy tax breaks,” Alexander told reporters.
Alexander listed a number of possible areas toward which the savings could be directed, including energy research, deficit reduction and reducing marginal tax rates.
Alexander’s remarks came as bipartisan negotiators trying to craft a plan to rein in the soaring national debt met for nearly three hours Wednesday. The talks, led by Vice President Biden, are aimed at reaching a preliminary agreement before the July 4 break.
On Wednesday, the group focused on how to enforce a multi-year deal and also discussed a White House proposal to expand to employers the one-year payroll tax holiday that benefits workers. According to people familiar with the talks, Democrats are hoping that Republicans might accept the expansion as a tax cut that could be used to offset other sorts of revenue increases.
Republican leaders, however, are not enthusiastic about expanding the payroll tax holiday. And a Senate Republican aide familiar with the Biden talks called the idea that Republicans might be willing to pair it with tax increases “pure, unadulterated nonsense.”