Washington—The U.S. Senate today voted 73-27 in favor of an amendment by Senator Dianne Feinstein (D-Calif.) to eliminate the Volumetric Ethanol Excise Tax Credit (VEETC) and repeal the import tariff on foreign ethanol. The amendment was identical to the Ethanol Subsidy and Tariff Repeal Act, which was introduced by Senator Tom Coburn, M.D. (R-Okla.) and Senator Feinstein in May.
“Today’s overwhelming vote shows a bipartisan consensus to repeal irresponsible ethanol subsidies and tariffs,” Senator Feinstein said. “The 73 votes sent a powerful message that the days of big subsidies for ethanol are coming to a close. We must be serious about addressing the debt and deficit, and this is a good first step.”
The ethanol subsidy currently gives large oil companies 45 cents for every gallon of ethanol they blend with gasoline, even though much of that use is mandated by law. If the subsidy is repealed by July 1, as the amendment calls for, it will save approximately $2.7 billion for the remainder of 2011.
The ethanol tariff is comprised of a 54-cent-per-gallon secondary tariff and a 2.5 percent ad valorem tax. The ethanol tariff makes the United States nation more dependent on foreign oil by increasing the price of imported ethanol.
“Ethanol is the only industry I know of that receives a triple crown of government support: its use is mandated by law, it enjoys protective tariffs and oil companies receive federal subsidies to use it,” Senator Feinstein added. “These flawed policies, which cost taxpayers nearly $6 billion a year, must be changed.”