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Senate Votes To End Thirty-Three-Year-Old Ethanol Subsidies

For Immediate Release: 
Thursday, June 16, 2011


The U.S. Senate voted today 73 to 27 to repeal the ethanol tax credit and ethanol tariff. This historic vote, which came on an amendment to S. 782, the Economic Development Revitalization Act, signifies the Senate’s willingness to put an end to more than 30 years of government subsidies for ethanol, a mature industry that is pressuring farmers to plant environmentally-sensitive land and pushing up food prices that disproportionately affect the poor and hungry of developing countries.

“The Senate has put American taxpayers and our soil and water ahead of special interests and the corn ethanol lobby,” said Sheila Karpf, a legislative and policy analyst at the Environmental Working Group.

Sens. Dianne Feinstein, D-Calif., and Tom Coburn, R., Okla. led the successful effort to end the tariff and Volumetric Ethanol Excise Tax Credit. VEETC is a 45-cent per gallon tax credit paid to oil companies to blend ethanol with gasoline. Repealing it will save taxpayers 6 billion dollars a year.

An amendment by Sen. John McCain, R-Ariz., to bar the use of federal funds forethanol blender pumps and storage tanks failed in the Senate. But the House voted 283 to 128 for a provision by Rep. Jeff Flake, R-Ariz., to stop funding ethanol pumps and tanks.

Environmental Working Group will continue to work with members of both houses to ensure that the corn ethanol industry does not squeeze scarce taxpayer dollars from empty federal coffers. Funding blender pumps and ethanol pipelines locks in corn ethanol and locks out advanced biofuels.


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