Groups representing the poultry, livestock, and meatpacking industries have urged a group of six key U.S. Senators to abandon the ethanol tax subsidy that is costing taxpayers billions of dollars per year and driving up the cost of food to American consumers.
The Volumetric Ethanol Excise Tax Credit (VEETC) allows petroleum companies to claim a credit of 45 cents for each gallon of ethanol that is added to motor fuel, at a cost to the Treasury of approximately $6 billion this year. The credit is scheduled to expire at the end of 2011, but ethanol interests are fighting to have it extended.
“Not only would saving the U.S. Treasury $6 billion in lost revenue be a prudent budgetary decision, such action would also be a good and strong signal that it is now time for the 30-year old ethanol industry to begin to compete in the marketplace without the aid of government subsidies,” said a letter from the National Chicken Council, and the American Meat Institute, National Cattlemen’s Beef Association, National Meat Association, National Pork Producers Council, and National Turkey Federation.
The groups appealed to Senators Saxby Chambliss (R-GA); Mike Crapo (R-ID); Tom Coburn, (R-OK); Richard Durbin (D-IL); Kent Conrad (D-ND); and Mark Warner (R-VA), the bipartisan “gang of six” that is attempting to draft a budget compromise for 2012 and beyond.
“A number of studies by well-respected economists have confirmed that eliminating the VEETC would only minimally impact the quantity of ethanol manufactured as the quantity relates to the Renewable Fuels Standard,” the groups added.
