Costa Continues Fight to End Corn Ethanol Subsidies
Washington, D.C. – Congressman Jim Costa (D-Fresno) continued his fight against wasteful taxpayer subsidies for corn ethanol by joining his colleagues in introducing the Ethanol Subsidy Repeal Act, bipartisan legislation that would fully eliminate the Volumetric Ethanol Excise Tax Credit (VEETC) and repeal the import tariff on foreign ethanol. The bill would save taxpayers $2.7 billion this year and $6 billion in each subsequent years.
"Each year, Americans foot the bill for our nation's misguided corn ethanol subsidies to the tune of $6 billion," Costa said. "These wasteful subsidies divert corn into our gas tanks and away from the feedstock our ranchers and dairymen depend on. As a result, food costs have skyrocketed, while livestock and dairy producers are confronting possible feed shortages. Ethanol is one tool in our energy toolbox, but the current policy is unsustainable."
The federal government currently subsidizes the production of corn ethanol through the VEETC, a $0.45 per gallon ethanol tax credit; a $0.54 per gallon tariff on imported corn-based ethanol; and the enforcement of the federal Renewable Fuel Standard (RFS), which mandates the use of ethanol.
In May, Costa called for a "full and fair debate" and "commonsense reforms" to American ethanol policy in a letter sent to President Obama, Treasury Secretary Timothy Geithner, Speaker of the House John Boehner (R-Ohio), and Democratic Leader Nancy Pelosi (D-Calif.)
"This bipartisan legislation will end unnecessary government support for an industry that might have needed incentives to get off the ground but clearly no longer needs such support. We ought to have a debate in the light of day about our nation's misguided corn ethanol policy," Costa added. "I hope the House leadership will listen to the message sent last week by our friends in the Senate: End these price distorting subsidies."
The legislation closely resembles an amendment offered by Senators Dianne Feinstein (D-Calif.) and Tom Coburn (R-Okla.) that overwhelmingly passed the Senate last week by a vote of 73-27.
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