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
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