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Webb joins group of senators urging end to ethanol tariffs, subsidies

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A bipartisan group of 12 senators, led by Sens. Jim Webb (D-Va.) and Tom Coburn (R-Okla.), today sent a letter to Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Kent.) urging them to make full elimination of costly ethanol subsidies and tariffs a priority.

In June, a measure offered by Sen. Dianne Feinstein (D-Calif.) and co-sponsored by Sen. Webb that would have terminated the Volumetric Ethanol Excise Tax Credit (VEETC) and tariffs on imported ethanol, passed with bipartisan support in a 73-27 vote and would have saved taxpayers $6 billion annually.

Earlier this month, a compromise on ethanol subsidies was reportedly reached in the Senate. Although the deal would have ended the blender credit subsidies, it proposed to create new subsidy programs to support ethanol infrastructure.

“The Senate recently voted overwhelmingly to adopt an amendment offered by Senator Feinstein to terminate the Volumetric Ethanol Excise Tax Credit (VEETC) and tariff on imported ethanol by July 1, 2011,” the Senators said in their letter. “In keeping with the results of the recent vote, we should ensure that both the VEETC and import tariff are ended as soon as possible.”

“In light of current ongoing negotiations over reducing the budget deficit, we urge you to bring the original Feinstein-Coburn amendment before the Senate again in the near future, to ensure that the approximately $6 billion in taxpayer money that is annually spent to support ethanol production is terminated.”

In response to the senators’ letter, Virginia Poultry Federation President Hobey Bauhan commented, “Ending federal ethanol supports will not only save billions in tax dollars, but will also reform misguided food to fuel policies that have devastated U.S. producers of meat and poultry by artificially increasing feed costs and harmed consumers with higher food costs. We commend and thank Senator Webb and his colleagues in the Senate who recognize that ethanol has failed to impact our dependence upon foreign oil or provide any environmental benefits.”

Sen. Webb has long been concerned about the negative effects of ethanol protections in the United States on other sectors of the economy. He has co-sponsored several legislative measures to repeal ethanol subsidies, including an amendment to tax legislation that would redirect funding from ineffective ethanol subsidies and tariffs toward advanced energy technologies and U.S. deficit reduction.

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