U.S. Senate votes to repeal VEETC

The U.S. Senate voted to pass the Feinstein/Coburn amendment that repeals the 45-cent per gallon Volumetric Ethanol Excise Tax Credit (VEETC) and the 54-cent per gallon tariff on imported ethanol is a giant step toward leveling the playing field for a bushel of corn. It was a 73-27 vote on the legislation introduced by Senators Dianne Feinstein (D-Calif.) and Tom Coburn (R-Okla.).

“The VEETC and the tariff on imported ethanol have put cattlemen and other end-users of corn at a competitive disadvantage to the corn-based ethanol industry when it comes time to buy a bushel of corn. Repealing the VEETC and the import tariff are important steps to fully leveling the playing field. We commend the 73 U.S. Senators who supported the Feinstein/Coburn amendment,” said Bill Donald, National Cattlemen’s Beef Association president. “Cattlemen aren’t opposed to ethanol. In fact, we support our nation’s commitment to reducing our dependence on foreign oil. But after 30 years and more than $30 billion in taxpayer support, the day has come to let the mature corn-based ethanol industry stand on its own two feet.”

Donald said with tight corn supplies and high prices, all end-users of corn should compete on equal footing for every bushel. He said a recent U.S. Department of Agriculture (USDA) World Agricultural Supply and Demand Estimates (WASDE) report is further evidence that it’s time to stop propping up the corn-based ethanol industry. According to the monthly report, 1.5 million fewer acres of corn will be planted and 1.9 million fewer acres of corn will be harvested in the United States this year leaving worldwide stockpiles at tight levels.

“Every bushel of corn is critical. Cattlemen aren’t asking for a handout from the federal government.  We’re simply asking to compete head to head on a level playing field,” Donald said. “Passing the Feinstein/Coburn amendment sends a loud signal that it’s time to take the American taxpayer off the hook for the corn-based ethanol industry. We will continue supporting this and other efforts to end taxpayer support of an industry that should be able to survive on its own.”

The National Corn Growers Association expressed severe disappointment in the passage of the amendment

“Today the Senate voted against rural America and domestic, renewable energy, and in favor of more foreign oil,” said Bart Schott , NCGA President, a grower from Kulm, N.D., said.  “Sen. Feinstein has unfairly hit at the heart of an important agricultural industry while remaining unified with subsidy-laden Big Oil.”

Schott pointed out that one comprehensive report found that subsidies for the oil industry total up to $280 billion annually, representing up to $2 per gallon of gasoline. A recent legislative effort to eliminate $2 billion of these oil subsidies went nowhere in Congress, he noted, after organizations like the National Taxpayers Union painted it as a tax increase.

The ethanol industry supports more than 400,000 U.S. jobs, contributing more than $56 billion each year to the nation’s economy and $11 billion in federal, state and local tax revenue, Schott said.

“Last year, 81 senators voted to extend the blender’s credit for one year to allow us to move forward with a proposal to reform these incentives,” Schott said. “We have proposed such legislation and have shown a willingness to work with all parties on a solution, and we thank the senators who stood by their vote last year and stood by us in this week’s effort.”

Also, in a victory for corn growers and the ethanol industry, the Senate rejected a proposed amendment by Sen. John McCain that would have prevented the U.S. Department of Agriculture from providing grants for blender pumps.

“This is good news because we want to do all we can to encourage fuel choice,” Schott said. “Blender pumps provide options for those with flex-fuel vehicles and can help the ethanol industry grow in the years to come.”

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