Congress votes to reduce support of ethanol

by Bryan Salvage
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WASHINGTON – Both the House of Representatives and the Senate on June 16, in bipartisan actions, approved two separate amendments that would reduce the federal government’s support of corn-based ethanol, according to the American Meat Institute.

The Senate approved an amendment to the Economic Development Revitalization Act introduced by Senator Diane Feinstein (D-Calif.) and Senator Tom Coburn (R-Okla.) that would fully eliminate the Volumetric Ethanol Excise Tax Credit (VEETC) and fully repeal the import tariff on foreign ethanol by a vote of 73-27.

Meanwhile, the House voted 283-128 to pass an amendment introduced by Rep. Jeff Flake (R-Ariz.) that would prohibit the US Department of Agriculture from using appropriated funds for the installation of ethanol pumps and storage facilities.

“At a time of record federal deficits coupled with rising food prices, it is time to end the 30-plus years of taxpayer subsidies afforded to the corn-based ethanol industry, which is costing taxpayers approximately $6 billion this year alone,” said J. Patrick Boyle, AMI president and CEO. “The passage of these two measures, which received wide and bipartisan support, highlights a growing concern on Capitol Hill about unnecessary federal support of corn-based ethanol. It is time the corn ethanol industry operates on a level playing field with other commodities that rely on corn as their major input.”

But Agriculture Secretary Tom Vilsack voiced his displeasure with these moves.

"President Obama has outlined a plan to reduce our oil imports by one-third by 2025,” he said. “Biofuels play a central role in this plan, which is why this administration continues to support and invest in the development of these important, domestically produced fuels.

“The administration supports efforts currently underway in the Senate to reform and modernize tax incentives and other programs that support biofuels,” he added. “However, [the June 16] amendments are not reforms and are ill advised. They could lead to job loss and pull the rug out from under industry, which will lead to less choice for consumers and greater dependence on foreign oil.

"We need reforms and a smarter biofuels program, but simply cutting off support for the industry isn't the right approach. Therefore, we oppose a straight repeal of the Volumetric Ethanol Excise Tax Credit [VEETC] and efforts to block biofuels infrastructure programs," he concluded.
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