Yesterday, 27 senators from both parties voted against an amendment introduced by Dianne Feinstein (D-Calif.) to repeal the Volumetric Ethanol Excise Tax Credit (VEETC). Nearly all of those senators (most from Great Plains states with large agricultural sectors) instead support ending the subsidy through a bill cosponsored by Sens. John Thune (R-S.D.) and Amy Klobuchar (D-Minn.). While most of these lawmakers claim they want to end ethanol subsidies, the details of the legislation reveal a plan that trades one set of subsidies for another.
The Thune-Klobuchar bill, as Thune announced yesterday, would repeal the VEETC but continue to give other credits to the ethanol fuel industry. The bill would extend and expand existing tax credits (i.e. subsidies), including extending a fuel station tax credit until 2016 and a small producer tax credit until 2014. Additionally, the added revenue from repealing the VEETC would be spent by Congress on supporting alternative fuel infrastructure.
The Feinstein amendment, by contrast, simply moves the expiration date of the VEETC up from December 31 to "the later of June 30, 2011, or the date of the enactment the Ethanol Subsidy and Tariff Repeal Act", the corresponding legislation authored by Feinstein and Tom Coburn (R-Okla.). The Feinstein-Coburn legislation does not extend or expand any other alternative fuel subsidies.
Is it any wonder, then, that the ethanol industry is supportive of Thune-Klobuchar but was "disappointed" by the result of the vote on the Feinstein amendment?