WASHINGTON — U.S. Senator Ben Cardin (D-MD) made the following remarks after Senate passage of an amendment to the Economic Development Act that would repeal the Volumetric Ethanol Excise Tax Credit (VEETC). The provision, which passed 73-27, was based on S. 871, of which Senator Cardin is a key original co-sponsor.
“We have moved a giant step closer to ending the duplicative and unnecessary Volumetric Ethanol Excise Tax Credit that is costing U.S. taxpayers billions of dollars a year. This issue is important to Marylanders and has a great impact on our economy. The ethanol and oil industries do not need nor do they deserve subsidies that are costly to American taxpayers, harm our environment and increase the cost of the food we eat.
“America needs to invest in alternative fuels that will not negatively impact our food supply. More than one-third of our nation’s corn is now going into the production of ethanol. This increased demand for corn is raising the price of everything from eggs, to milk, to soft drinks, to chicken, to breakfast cereals, and it’s the American consumer who is hit hardest with higher food bills. I have heard loud and clear for Maryland’s poultry industry that this subsidy hurts their operations and places Eastern Shore farm jobs at-risk. Ending the tax credit for ethanol should help stabilize prices and provide a much-needed boost for consumers and families nationwide.”
The VEETC is a de facto cash subsidy that directs 45 cents to refiners for every gallon of ethanol they blend with gasoline. The VEETC costs taxpayers approximately $6 billion a year. The bill calls for repealing the VEETC subsidy by July 1, 2011 which would save approximately $2.4 billion this year.