Left-Right Coalition Responds to Senate Vote on Ethanol Tax Credit

On Saturday (December 4, 2010), the Senate defeated a package of tax policy extensions, including a year extension of the Volumetric Ethanol Excise Tax Credit (VEETC) at $.36 per gallon, a 20 percent reduction from current levels.  In response, a diverse coalition of organizations issued a joint press release applauding the vote on the VEETC and explaining why the tax credit should not be renewed.

Here’s what the participants said:

 “A reduction in the corn ethanol tax credit is a small step in the right direction for animal agriculture and America’s taxpayers.  Burning a substantial portion of our food and feed as fuel is not a sustainable answer, in the long term, to solving this nation’s fuel needs.  Continuing to divert a significant portion of our corn crop into our fuel tanks will continue to increase costs for the meat and poultry industry and will result in higher food prices for consumers.” 
- J. Patrick Boyle, President and CEO, American Meat Institute

“The ethanol tax credit should be allowed to expire on schedule at the end of 2010.  In this period of huge deficits, there is no justification for the government’s losing billions of dollars in tax revenue to prop up an industry that already has a market required by law”
- George Watts, president of the National Chicken Council

“The VEETC will cost $4.75 billion next year alone, more than 2 times the roughly $2.25 billion in tax incentives for all other renewables in the tax extenders package. Not only is the VEETC bad fiscal policy, but it’s sucking all the oxygen out of our federal budget for renewables. This environmentally destructive handout to the oil industry means doing more harm than good when it comes to investing in clean energy and must be eliminated.”
- Nathanael Greene, Director of Renewable Energy Policy, Natural Resources Defense Council

“The blender’s credit and import tariff on foreign ethanol have distorted the corn market, creating needless volatility in the cost of animal feed.  Feed accounts for 70 percent of the total cost of raising a turkey, and corn is the single-largest ingredient in turkey feed.  The turkey industry has endured the deepest cutbacks of any in animal agriculture – a decrease in turkeys raised of more than 6 percent since 2007 levels and a near 9 percent reduction from 2008 levels – to adjust to these increased input costs. More importantly, the turkey industry eliminated nearly 3,000 jobs vital to rural America in 2008 and 2009 alone.”
 - Joel Brandenberger, president of the National Turkey Federation

“The federal government faces a projected deficit nearing $1.4 trillion next year, and yet some in Congress insist upon continuing to shell out billions through refundable tax credits to the ethanol industry. The time has come for Congress to end this wasteful practice and reduce burdens on taxpayers.”
 - Andrew Moylan, Director of Government Affairs, National Taxpayers Union

“While we believe a 20 percent reduction in the corn ethanol tax credit is a step in the right direction, spending $3.8 billion next year alone for conventional biofuels is still too much.  Today’s vote gives the Senate another chance to get this policy right, by further reducing or eliminating both the corn ethanol tax credit and import tariff.  We look forward to working with Congress to promote the development of truly sustainable advanced biofuels.”
- Geoff Moody, Manager, Federal Affairs, Grocery Manufacturers Association

“A growing choir of voices agrees: the Senate must pony up and end the subsidy for dirty corn ethanol for good.  When people across the country are having a hard time putting food on the table, welfare to millionaires and polluting corporations alike is unacceptable.   It’s impossible to justify wasting billions of taxpayer dollars on an industry that is bad for the environment and bad for the economy.”
- Kate McMahon, Biofuels Campaign Coordinator, Friends of the Earth

“With the national debt fast approaching parity with the GDP, now is not the time to renew a wasteful subsidy for even one year. Nor should tax policies vital to the nation’s economic recovery be held hostage to a special-interest giveaway. The November elections were a rebuke to fiscal irresponsibility in Washington. The lame duck Congress can show that it got the message by letting the VEETC meet its statutorily appointed fate.”
- Marlo Lewis, Senior Fellow in Environmental Policy, Competitive Enterprise Institute

“It makes no sense to spend billions of dollars a year on a fuel that does little to reduce America’s dependence on oil but does a lot to exacerbate soil erosion, water pollution and habitat destruction across the Corn Belt,”
- Craig Cox, Senior Vice President, Environmental Working Group
 
“Congress needs to scrap plans to extend VEETC.  This is an outdated and wasteful policy that does nothing for our energy security or environment.  With all the other critical funding needs facing the country, giving the oil industry billions of taxpayer dollars to follow the law just doesn’t make sense.”
 - Brendan Bell, Union of Concerned Scientists

“Reducing the corn ethanol tax credit is a step in the right direction.  However, allowing the ethanol tax credit to expire at the end of 2010 creates greater certainty for the grain industry. Other grains, including wheat, may increasingly be in shorter supply as the nation continues losing wheat acreage and market volatility remains high,”
- Robb MacKie, president and CEO, American Bakers Association

“Organizations from vastly different sides of the political spectrum have come together and said in a clear voice: it’s time to stop – not slow down – this policy of throwing billions of taxpayer dollars at an activity that serves little, if any, public benefit.  By creating huge incentives for corn to make its way to ethanol plants rather than be available to consumers and livestock, we are sacrificing our nation’s food independence while doing nothing to reduce our nation’s energy independence.  The time to stop this insanity is now.”
- Rob Vandenheuvel, Milk Producers Council

 “The American Frozen Food Institute commends the Senate for rejecting the continuation of a special-interest tax break that saddles food producers with higher costs and drives up prices for consumers in the check-out aisle.”
- Kraig R. Naasz, president and CEO, American Frozen Food Institute
 
“The wasteful and environmentally-damaging subsidy for corn ethanol should expire, as scheduled, at the end of 2010. The broad alliance calling for ending this taxpayer giveaway underscores the fact that it is the right thing to do for our nation’s fiscal health, our environment, and our food security.”
- Sara Chieffo, Deputy Legislative Director, League of Conservation Voters

“We welcome continued scrutiny of this wasteful tax subsidy, which in appropriately supports the water pollution and high-volume water use associated with corn ethanol production. Clean Water Action will continue to support energy choices that make protection of water resources a priority.”
- Lynn Thorp, National Campaigns Coordinator, Clean Water Action

“It’s time for the subsidy party for ethanol to end. Instead of giving taxpayers a lump of coal by wasting billions of dollars more on this failed policy, lawmakers should concentrate on ways to eliminate wasteful spending.”
 - Steve Ellis, Vice President, Tax Payers for Common Sense

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