New legislation has been introduced to end support for ethanol. Sen. Tom Coburn (R-OK) and Sen. Dianne Feinstein (D-CA) have sponsored The Ethanol Subsidy and Tariff Repeal Act, which if enacted, would fully eliminate the Volumetric Ethanol Excise Tax Credit (VEETC) and fully repeal the import tariff on foreign ethanol.
The American Meat Institute (AMI) joined almost 50 associations in sending a letter of support to the lawmakers.
“Conventional ethanol is due to receive some $6 billion in taxpayer funds this year,” the groups wrote. “Continuing to subsidize oil companies to blend ethanol – which they are already required to do by the Renewable Fuels Standard – is wasteful and unnecessary. The Ethanol Subsidy and Tariff Repeal Act will save U.S. taxpayers several billion dollars this year and have almost no impact on ethanol production, jobs or prices.”
AMI President and CEO J. Patrick Boyle praised the action.
“I commend Senators Coburn and Feinstein for their leadership on this important issue. At a time of record federal deficits coupled with rising food prices, it is time to end the 30 years of taxpayer subsidies afforded to the corn-based ethanol industry, which is costing taxpayers approximately $6 billion this year alone. By eliminating the Volumetric Ethanol Excise Tax Credit and the import tariff, this bill would be a tremendous first step in eliminating unnecessary federal support for corn 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. AMI strongly supports this bill and encourages its swift passage in the Senate.”
AMI also joined with other industry groups, including the National Pork Producers Council, in urging the Senate to eliminate the VEETC in order to save taxpayers more than $6 billion per year.
“Not only would saving the U.S. Treasury $6 billion in lost revenue be a prudent budgetary decision, such action would also be a good and strong signal that it is now time for the 30-year-old ethanol industry to begin to compete in the marketplace without the aid of government subsidies,” the group of bipartisan senators known as the “gang of six” wrote regarding a budget resolution for Fiscal Year 2012 and beyond. The “gang of six” includes Senators Saxby Chambliss (R-GA); Mike Crapo (R-ID); Tom Coburn (R-OK); Richard Durbin (D-IL); Kent Conrad (D-ND); and Mark Warner (R-VA).