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Coalition Applauds Bipartisan Bill to Eliminate Ethanol Subsidy

Posted May. 3, 2011 / Posted by: Nick Berning

FOR IMMEDIATE RELEASE

CONTACT: Brendan McLaughlin, brendan@resource-media.org, 206. 374.7795 x108

WASHINGTON, DC -- A broad and diverse coalition today sent a letter applauding Senators Coburn (R-OK) and Feinstein (D-CA) for combining their efforts to end billions of dollars in taxpayer-funded subsidies for conventional ethanol by introducing the bipartisan “Ethanol Subsidy and Tariff Repeal Act.”

The coalition includes business associations, taxpayer advocates, hunger and development organizations, agricultural groups, free-market groups, religious organizations, environmental groups, budget hawks, and public interest organizations.

Conventional ethanol is subsidized with refundable tax credits worth $0.45 per gallon when it is blended into gasoline. When enacted, the legislation will save taxpayers several billion dollars per year.

The coalition letter is available at: http://www.foe.org/sites/default/files/Coburn-Feinstein%20Support%20Letter%20FINAL.pdf (PDF)

Statements from members of the coalition follow:

Marie Brill, Senior Policy Analyst, ActionAid USA:

“Senators Coburn and Feinstein’s bill will help rebalance our food and energy policies while saving taxpayer dollars. The United Nations projects the world population will reach 7 billion by October, almost 1 billion of whom go to bed hungry every night. This presents a huge demand challenge for global agriculture that will only be harder to overcome if we continue to siphon crops from food and feed to fuel.”

Kraig R. Naasz, President and CEO, American Frozen Food Association:

“The American Frozen Food Institute commends Senators Colburn and Feinstein for leading the effort to end the continuation of a special-interest tax break that saddles frozen food producers with higher costs and drives up prices for consumers in the check-out aisle.” 

Bill Wilson, President, Americans for Limited Government

“The government’s $6 billion annual subsidy of ethanol needs to be ended once and for all.   It is inefficient and too costly for American taxpayers at a time when the national debt has already soared past $14.3 trillion.”

J. Patrick Boyle, President and CEO, American Meat Institute:

“I commend Senators Coburn and Feinstein for their leadership on this important issue.  At a time of record federal deficits coupled with rising food prices, it is time to end the 30 years of taxpayer subsidies afforded to the corn-based ethanol industry, which is costing taxpayers $6 billion this year alone.  By eliminating the Volumetric Ethanol Excise Tax Credit and the import tariff, this bill would be a tremendous first step in eliminating unnecessary federal support for corn ethanol.  It is time the corn ethanol industry operates on a level playing field with other commodities that rely on corn as their major input.  AMI strongly supports this bill and encourages its swift passage in the Senate.”

Marlo Lewis, Senior Fellow, Competitive Enterprise Institute:  

“If ethanol is such a great bargain, why do we need a law to make us buy it? And if we have to buy it, why must we also subsidize it with our tax dollars? Finally, if the ostensible purpose is to ease our pain at the pump, why erect a tariff barrier that prevents us from buying ethanol at internationally competitive prices? No part of the Ethanol Troika (mandate, tax credit, tariff) makes sense except as crass political payoffs to special interests. CEI congratulates Sens. Coburn and Feinstein for introducing their bold pro-consumer, pro-taxpayer legislation.”

Sheila Karpf, Legislative and Policy Analyst, Environmental Working Group:

"Environmental Working Ground thanks Senators Feinstein and Coburn for working together to reverse course on corn ethanol policies that encourage industrial-scale, fence row to fence row cultivation of chemical intensive crops that sacrifices fertile soil and clean water for a fuel that does little to lessen America's dependence on oil."

Kate McMahon, Biofuels Campaign Coordinator, Friends of the Earth:

“Friends of the Earth sincerely thanks Senators Coburn and Feinstein for working together on behalf of the public interest. This bill would save billions of taxpayer dollars by eliminating a subsidy that promotes pollution. It's a win-win proposition."

Geoff Moody, Director of Energy and Environmental Policy, Grocery Manufacturers Association:

“GMA applauds Senators Coburn and Feinstein for introducing the Ethanol Subsidy and Tariff Repeal Act.  Thirty years of subsidies, mandates, and trade barriers have made the U.S. corn ethanol industry the largest biofuels industry in the world, consuming 40 percent of the U.S. corn crop.  It is now time for the industry to stand on its own without being propped up by the American taxpayer.  This legislation is an important step in that direction and toward reducing our reliance on food and feed for fuel.  We urge Congress to pass this important legislation quickly.”

 Mike Brown, President, National Chicken Council:

“The extravagant federal program of support for corn ethanol is driving up the cost of food.  Consumers and poultry producers alike urgently need relief from this wrong-headed policy.  After 30 years being propped up by the taxpayers, it is time for the ethanol industry to stand or fall on its own.”

Rob Green, Executive Director, National Council of Chain Restaurants:

“This tax credit and the ethanol import tariff are outdated and no longer necessary for an industry that can and should stand on its own,” National Council of Chain Restaurants Executive Director Rob Green said. “These subsidies and tax breaks cost Americans billions of dollars out of the U.S. Treasury each year and untold billions more in higher food costs. It’s time to end these outmoded subsidies, and we urge Congress to move swiftly to achieve this goal.”

Joel Brandenberger, President, National Turkey Federation:

“NTF commends Sens Tom Coburn, R-Okla., and Dianne Feinstein, D- Calif., for introducing legislation that would eliminate the 30-year-old Volumetric Ethanol Excise Tax Credit (VEETC) and import tariff on foreign ethanol.  This is the first step in ensuring the mature corn-based ethanol industry competes fairly in the marketplace.  Both the VEETC and import tariff have distorted the corn market and increased costs for those in animal agriculture, ultimately raising the cost of food for consumers.  Therefore, NTF supports the elimination of the tax credit and import tariff.” 

Franz Matzner, Climate and Air Legislative Director, Natural Resources Defense Council:

 “The writing is on the wall for old, dirty corn ethanol: its time at the public trough is over.  The Feinstein-Coburn bill will save taxpayers billions, force the industry to stand on its own, and help wean this country off a dirty fuel that pollutes our environment.”

 Jeremy Martin, Senior Scientist, Union of Concerned Scientists:

“It’s time to move beyond the wasteful policies of yesterday and target scarce resources on cleaning up today’s biofuels and scaling up the next generation.”

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