Senate passes Webb amendment to end ethanol subsidies and tariffs
Today, the Senate overwhelmingly approved Sen. Jim Webb’s amendment to eliminate the Volumetric Ethanol Excise Tax Credit and repeal the import tariff on foreign ethanol. The measure, which he co-sponsored with Senators Tom Coburn (R-Okla.) and Dianne Feinstein (D-Calif.), passed with bipartisan support in a 73-27 vote and will save taxpayers $6 billion annually.
“Eliminating ethanol subsidies and trade barriers will help decrease the budget deficit, benefit the environment, and lessen our reliance on imported oil,” said Webb, D-Va. “I am pleased that this common sense reform received such bipartisan support. It is only through legislation like this that we will achieve sustained reductions in our deficit.”
Sen. Webb has long been concerned about the negative effects of ethanol protections in the United States on other sectors of the economy. In addition to offering legislation similar to what passed today, Senator Webb also partnered with Senators Feinstein and Shaheen in December on an amendment to tax legislation that would redirect funding from ineffective ethanol subsidies and tariffs toward advanced energy technologies and U.S. deficit reduction.
The VEETC is a de facto cash subsidy that directs 45 cents to refiners for every gallon of ethanol they blend with gasoline. The VEETC costs taxpayers approximately $6 billion a year. Repealing the subsidy now will save approximately $3 billion this year
Webb continues push to eliminate ethanol subsidies
Sen. Jim Webb (D-VA) joined Sens. Tom Coburn, M.D. (R-OK) and Dianne Feinstein (D-CA) to introduce the Ethanol Subsidy and Tariff Repeal Act, which will fully eliminate the Volumetric Ethanol Excise Tax Credit (VEETC) and repeal the import tariff on foreign ethanol. The bill is similar to legislation sponsored by Webb earlier this year, and has been filed as an amendment (#309) to the small business bill pending in the Senate.
“Eliminating or reducing ethanol subsidies and trade barriers would help decrease the budget deficit, benefit the environment, and lessen our reliance on imported oil,” Webb said. “Historically our government has helped a product compete in one of three ways: subsidize it, protect it from competition, or require its use. Ethanol may be the only product receiving all three forms of support from the U.S. government at this time.”
Webb has long been concerned about the negative effects of ethanol protections in the United States on other sectors of the economy. In November 2010, he signed a bipartisan letter with 16 other Senators that called for an end to ethanol subsidies and tariffs. Webb also partnered with Senators Feinstein and Shaheen in December on an amendment to tax legislation that would redirect funding from ineffective ethanol subsidies and tariffs toward advanced energy technologies and U.S. deficit reduction.
The VEETC is a de facto cash subsidy that directs 45 cents to refiners for every gallon of ethanol they blend with gasoline. The VEETC costs taxpayers approximately $6 billion a year. If the VEETC subsidy is repealed by July 1, 2011, as the bill calls for, it will save approximately $3 billion this year.
The ethanol tariff is comprised of a .54 cent ‘Most Favored Nation’ duty and a 2.5 percent ad valorem tax. The tariff makes our nation more dependent on foreign oil by increasing the price of imported ethanol.
Cosponsors also include Sens. Ben Cardin (D-MD), Richard Burr (R-NC), Susan Collins (R-ME), and James Risch (R-ID).
Webb continues push to end ethanol subsidies
Sen. Jim Webb, D-Va., yesterday joined Sen. Dianne Feinstein, D-Calif., to introduce legislation that would repeal the 45-cent-per gallon subsidy for corn ethanol blenders, saving the nation approximately $6 billion a year.
The bill also lowers the tariff on imported ethanol to match the 45-cent-per gallon subsidy that will remain in place for non-corn, second generation “advanced biofuels.”
“Eliminating or reducing ethanol subsidies and trade barriers would help decrease the budget deficit, benefit the environment, and lessen our reliance on imported oil,” Webb said. “Historically our government has helped a product compete in one of three ways: subsidize it, protect it from competition, or require its use. Ethanol may be the only product receiving all three forms of support from the U.S. government at this time.”
In November 2010, Webb signed a bipartisan letter with 16 other Senators that called for an end to ethanol subsidies and tariffs. The senator also partnered with Senators Feinstein and Shaheen in December on an amendment to tax legislation that would redirect funding from ineffective ethanol subsidies and tariffs toward advanced energy technologies and U.S. deficit reduction.
Webb backs effort to redirect ethanol dollars
U.S. Sen. Jim Webb, D-Va. joined Sens. Dianne Feinstein, D-Calif., and Jeanne Shaheen, D-N.H., yesterday in introducing an amendment to pending tax legislation which would save billions of dollars and redirect funding from ineffective ethanol subsidies and tariffs toward advanced energy technologies and U.S. deficit reduction.
“Reducing the ethanol subsidies and trade barriers would reduce the overall cost to taxpayers, while allowing Congress to support the vitally important development of our manufacturing sector through the Advanced Energy Manufacturing Tax Credit,” Webb said.
Currently, the United States has a 54 cent-per-gallon tariff on ethanol imports and a 45 cent-per-gallon subsidy on blending ethanol into gasoline. In addition, the Federal Renewable Fuels Standard mandates an annually increasing usage of corn ethanol. These protections are expensive and redundant. The amendment would lower the tariff and subsidy to 36 cents-per-gallon. The resulting $2 billion in savings would be used to reduce the deficit and to renew the Advanced Energy Manufacturing Tax Credit, which was created under the 2009 economic stimulus law to spur renewable technology advancement. The tax credit would fund the advancement of projects such as smart grid technology, energy storage capabilities, and geothermal energy technologies.
In a 2009 letter, Sen. Webb recommended the Environmental Protection Agency examine more closely the negative effects ethanol protections have on other sectors of the economy. Ethanol subsidies have led to steep increases in the price of corn and other sources of feed, which have negatively affected beef cattle, dairy and poultry producers and driven up the cost to consumers of commodities like milk and eggs. He also sent a letter to Secretary of State Hillary Clinton and U.S. Trade Representative Ron Kirk expressing concerns over the ethanol tariff.
Edited by Chris Graham. Chris can be reached at freepress2@ntelos.net.
Webb: Congress should end ethanol subsidies
U.S. Jim Webb, D-Va., today called for an end to costly ethanol subsidies and tariffs. In a bipartisan letter, Sen. Webb and other senators urged Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Kent., to eliminate the protections currently manipulating ethanol costs and restricting U.S. trade. The current subsidies and tariffs on domestic ethanol are set to expire on Dec. 31.
“Eliminating or reducing ethanol subsidies and trade barriers are important steps we can take to reduce the budget deficit, improve the environment, and lessen our reliance on imported oil,” said the senators. “Historically our government has helped a product compete in one of three ways: subsidize it, protect it from competition, or require its use. Ethanol may be the only product receiving all three forms of support from the U.S. government at this time.”
Currently, the United States has a 54 cent-per-gallon tariff on ethanol imports and a 45 cent-per-gallon subsidy on blending ethanol into gasoline. In addition, the Federal Renewable Fuels Standard mandates an annually increasing usage of corn ethanol. These protections are expensive and redundant.
“We cannot afford to pay industry for following the law,” said the senators, noting that subsidies would cost taxpayers at least $31 billion over the next five years.
In a 2009 letter, Sen. Webb recommended the Environmental Protection Agency examine more closely the negative effects ethanol protections have on other sectors of the economy. Ethanol subsidies have led to steep increases in the price of corn and other sources of feed, which have negatively affected beef cattle, dairy and poultry producers and driven up the cost to consumers of commodities like milk and eggs. He also sent a letter to Secretary of State Hillary Clinton and U.S. Trade Representative Ron Kirk expressing concerns over the ethanol tariff.
Edited by Chris Graham. Chris can be reached at freepress2@ntelos.net.
