Source:  Michael Fielding, MEATINGPLACE, 6/15/11
 

On Tuesday the U.S. Senate rejected an amendment that would have killed the annual $6 billion taxpayer subsidy for corn ethanol. The measure to eliminate the tax break fell 20 votes short of the 60 needed to advance it.

According to a coalition of meat-and-poultry industry associations supporting the bipartisan “Ethanol Subsidy and Tariff Repeal Act,” the legislation would have saved taxpayers several billion dollars per year. Conventional ethanol is subsidized with refundable tax credits worth 45 cents per gallon when blended into gasoline. That subsidy is known formally as the Volumetric Ethanol Excise Tax Credit (VEETC) and is scheduled to expire at the end of the year.

The vote comes less than a week before the Group of 20 conference in Paris, when representatives of the world’s largest economies is expected to discuss a report by 10 international agencies to drop policies supporting biofuels because of the effect they have on global food prices.

Meanwhile, the “Ethanol Reform and Deficit Reduction Act” was introduced Monday as support began to wane for the repeal act. That new bill would reduce the current ethanol consumption subsidy in an effort to shift federal tax incentives to retail gasoline vendors who install ethanol blender pumps.

It also would extend current tax incentives for research and development targeted at using non-food cellulosic feedstocks in commercial production.

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