WASHINGTON, DC – U.S. Senator Jack Reed (D-RI) today voted to reduce the deficit and save taxpayers billions of dollars by ending unneeded ethanol subsidies. The bill to scrap $6 billion in ethanol blender tax credits, which primarily go to oil companies that blend the ethanol with gasoline, passed the full Senate by a final vote of 73-27.
“Corn ethanol subsidies are bad for consumers and bad for the environment. I am pleased we were able to finally get bipartisan support to end these expensive subsidies. Eliminating ethanol subsidies is a fiscally responsible way to cut the deficit,” said Reed. “It is long past time we kicked big oil companies off corporate welfare and removed barriers to other forms of more efficient and promising biofuels.”
The Senate bill eliminates the 45-cent-a-gallon tax subsidy provided for U.S. producers of ethanol and removes the 54-cent-a-gallon tariff on imported ethanol. The ethanol tariff makes actually makes the U.S. more dependent on foreign oil by increasing the price of imported ethanol.
The Senate bill eliminates the 45-cent-a-gallon tax credit provided for U.S. producers of ethanol and removes the 54-cent-a-gallon tariff on imported ethanol. The ethanol tariff actually makes the U.S. more dependent on foreign oil by increasing the price of imported ethanol. The establishment of the renewable fuel standard (RFS) requires transportation fuels to contain certain volumes of biofuels, and the Government Accountability Office (GAO) concluded that the ethanol tax credit and the renewable fuel standard can be duplicative in stimulating domestic production and use of ethanol. And by forcing hundreds of thousands of acres of corn to be used in making an inefficient fuel source, the subsidies were contributing to higher food prices for American consumers.