BINGAMAN: ETHANOL SUBSIDY SHOULD END
U.S. Senator Jeff Bingaman voiced his support for the end of a subsidy of ethanol – an additive to gasoline aimed at reducing pollution.
Today, Bingaman voted in favor of an amendment introduced by Senators Dianne Feinstein and Tom Coburn that would immediately end the subsidy, which is set to expire at the end of the year. The amendment passed 73-27.
Bingaman has said he would prefer to allow the subsidy to expire rather than to surprise businesses with a mid-year elimination. But he voted in favor of the amendment to make it clear he wants the ethanol subsidy to end.
“Many people are viewing this vote as a test for whether senators support the subsidy or want it to end. For the sake of allowing businesses to adequately plan, my preference is to have the subsidy expire at the end of the year, as intended. I do not expect this amendment to end tax subsidies for ethanol to become law. Consequently, my vote for the Feinstein-Coburn proposal reflects not my desire to immediately remove the subsidies, but instead my general belief that this subsidy should end,” Bingaman said.
The subsidy, known as the Volumetric Ethanol Excise Tax Credit, is an excise tax credit of 45 cents for every gallon of ethanol blended into the domestic gasoline supply. Created in 2004, it is one of the most recent in a line of tax preferences for ethanol fuel production dating back to 1978.
The credit is claimed by refiners who blend ethanol into gasoline, not by ethanol producers. In its current form, the credit is estimated to cost the federal government between $5 and $6 billion per year in foregone revenue.
The goal of the subsidy was to promote the production of non-petroleum-based, domestic fuel sources. However, many people believe that the Renewable Fuel Standard, created in 2005 and increased in 2007, is now a more significant driver of increased ethanol production.
On Tuesday, Bingaman voted against a similar amendment, in part, on procedural grounds; the amendment was forced to a vote under highly unusual circumstances.
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