What is in this article?:
- Senate passes repeal of ethanol tax credit
- House reaction
- Senate votes down ethanol tax credit.
- Would end 45-cent-per-gallon credit on July 1.
- Ethanol proponents lambast vote.
How might the House react?
“The underlying bill the amendment would be attached to isn’t expected to go anywhere. I doubt the House will take up this issue specifically.
“This year, the House hasn’t dealt with the VEETC yet so I don’t have a very good read on where they’re at. There are a lot of freshmen in the House.
“However, Tea Party Republicans are strong in the House and have made it clear that raising taxes isn’t something they’re willing to do. Since Grover Norquist (of Americans for Tax Reform infamy) has made it clear, this is a tax increase – and some Republicans have said the same. We hope they’ll be opposed if it were to come to a vote in the House.”
As the Coburn/Feinstein amendment was debated, ethanol proponents found proposed legislation offered by Minnesota Sen. Amy Klobuchar and South Dakota Sen. John Thune much more palatable.
“We are in favor of the Klobuchar/Thune proposal,” said Bennett. Backing the legislation “shows a willingness to reform on the part of the ethanol industry, which said ‘okay, if we’re going down this road, the ethanol industry is willing to accelerate the (reform) time line. We’re willing to go to a variable VEETC in order to give some cost-savings to the federal government.’”
The Klobuchar/Thune bill calls for a variable VEETC as soon as July 1.
“People should support what senators Klobuchar and Thune are doing to reform the ethanol tax incentive. The VEETC would only kick in when oil falls below $90 per barrel. Oil hasn’t been below $90 per barrel in several months. Right now, that would mean significant cost-savings for the federal government.
“The Klobuchar/Thune bill would provide about $1 billion in savings and dedicate about $1.5 billion to small producer tax credits, a cellulosic tax credit and go toward some infrastructure for the ethanol industry. It would also have some dedicated funds for the variable tax incentive.”
What it would mean if the House approves the Senate ethanol cut?
“The ethanol industry … is a significant economic driver in rural America. This could potentially be a devastating blow to rural America in these hard economic times.
“That’s something we hope we don’t have to face. Times are hard for everyone, right now. Ethanol plants are exception to the rule…
“It could mean lost jobs in rural America. And when jobs are lost, you lose revenue that is spent in small businesses in town. It has an impact on everyone.
“It certainly would have an impact on corn-growers. We provide corn to the ethanol plants and many of the growers are personally invested in those plants.”
What about the connection between ethanol and food prices?
“We’ve dispelled that … but it’s dredged up over and over. It’s just not the case.
“The price of food can be blamed on speculation. … Certainly, the price of oil has an impact on food prices more than anything.
“Sometimes people forget that the corn (grown for ethanol) isn’t corn grown for (human consumption). And on the back end, ethanol plants provide dry distillers grains – DDGs, a high-protein, high-quality feed – used to feed livestock.”