Late last week, Senator Tom Coburn (R-Okla.) offered an amendment in the Senate that would immediately repeal the Volumetric Ethanol Excise Tax Credit (VEETC), essentially pulling the rug out from under a domestic fuel source that adds more than $40 billion to the national Gross Domestic Product and displaces approximately 13 percent of total U.S. crude oil imports.
The ethanol industry has been working to reform the VEETC, trying to move to a variable credit that would provide a safety net for the ethanol industry while reducing the overall cost to the federal government. Comparatively, the oil and gas industries remain concerned about their government subsidies, a fact which Senator Coburn ignores.
Whether or not the amendment passes, the vote is symbolic. What do U.S. lawmakers really think about our homegrown, domestic fuel source? We’re about to find out.
Luckily, most of the Midwestern Senators stand behind corn-based ethanol production. Both Senator Durbin and Senator Kirk have expressed their opposition to the Coburn Amendment. Another group of Midwestern senators led by Chuck Grassley (R-Iowa) and Kent Conrad (D-N.D.) have introduced a bill reducing the blender credit and linking it to the price of crude oil over the next five years.
And today, Senator John Thune (R-S.D.) offered the Ethanol Reform and Deficit Reduction Act, giving the Senators who aren’t necessarily in favor of the Coburn amendment something else to vote for. Thune’s plan speeds up the end of VEETC as we currently know it and moves to a variable assistance and more money for infrastructure while still leaving the federal treasury $1 billion for deficit reduction. Both Illinois Senators are co-sponsors of this legislation.
Illinois Corn is currently working with Senator Durbin, Senator Kirk and other state corn grower associations to ensure Senator Thune’s legislation is the best possible option to both reduce the federal expenditures for the ethanol industry and guarantee ethanol producers a safety net.