The U.S. Senate rejected an amendment by Senator Coburn (R-OK) to repeal ethanol tax incentives, including the Volumetric Ethanol Excise Tax Credit (VEETC) or the “blenders’ credit” by a vote of 59 to 40.
“This vote is a major victory for the biofuels industry and American consumers and a setback for those clinging to our status-quo dependence on oil. It proves political stunts aimed at ethanol won’t be tolerated in the U.S. Senate. Now we can focus on continuing our work with the White House and both chambers of Congress to support meaningful and responsible legislation to reform ethanol policy, such as S. 1185, the Ethanol Reform and Deficit Reduction Act, introduced by Senators Thune, Klobuchar and many others this week,” said Brian Jennings, executive director, American Coalition for Ethanol (ACE).
“The Senate’s refusal to save taxpayers $3 billion by ending an ethanol subsidy the beneficiaries themselves don’t want highlights the incompetence and dysfunction of this body. Many senators who opposed this policy refused to end it because Senate Democratic leaders were upset about being forced to take a tough vote,” said U.S. Senator Tom Coburn, M.D. (R-OK).
“However, taxpayers should be encouraged that Republican senators overwhelmingly rejected the ludicrous argument that eliminating tax earmarks is a tax increase. Tax provisions should be examined on a case-by-case basis, not receive blanket amnesty,” Coburn added.
The Renewable Fuels Association (RFA) stated, “This vote demonstrates the lack of appetite for this kind of destructive policy and political gamesmanship. The Senate and the country need to focus on a comprehensive energy strategy that seeks to expand America’s ability to renewably meet its fuel needs. Initiatives like the legislation introduced by Senators Thune and Klobuchar yesterday are the exact kind of responsible policy prescriptions that will create domestic jobs and help meet the energy challenges of the 21st century.”
The Ethanol Reform and Deficit Reduction Act, offered by Senators John Thune (R-SD) and Amy Klobuchar (D-MN), proposes that VEETC would transition to a variable tax incentive tied to the price of oil. This bill also would make available funds saved by the transformation of VEETC to expand ethanol fueling infrastructure by improving tax policies currently available for blender pumps and other ethanol-related infrastructure.
In addition, the bill would extend current tax incentives for the next generation of ethanol technologies using cellulosic and other feedstocks. If passed, the bill would take effect July 1, 2011. This bill is similar to legislation introduced by Senators Chuck Grassley (R-IA), who is a cosponsor of this bill, and Kent Conrad (D-ND).