Senator Coburn Considers Ethanol Bad Economic Policy

Grassley and industry disagree.

Published on: Jun 14, 2011

The Senate will vote Tuesday on an amendment introduced by Senator Tom Coburn, R-Okla., to repeal the ethanol tax earmark and tariff, which he says saves $3 billion for the rest of the year and $6 billion each year. Coburn says eliminating the tax earmark and tariff would be a big step toward restoring fiscal sanity in Washington. He says today's way of doing business is a tax increase on anyone who can't hire a tax lobbyist or make large donations to special interest groups in Washington, a business he says taxpayers are tired of.

Senator Chuck Grassley, R-Iowa, disagrees with Coburn and took to the floor Monday to express his strong opposition to the amendment offered by the Oklahoma Senator. According to Grassley the amendment would raise the tax on domestic energy production. He believes all should be on the side of more domestically produced energy, and called the attack on domestic energy remarkable. Instead of fighting each other over domestic energy sources, Grassley says we should be fighting OPEC and foreign dictators and oil sheiks that hold our economy hostage.

Growth Energy President Jim Nussle says the ethanol industry isn't opposed to change. In fact he says they support reforming VEETC and building out infrastructure by adding flex fuel pumps and flex fuel vehicles. Nussle says that would maintain choice for consumers at a time of high energy prices and do so in a fiscally responsible way.

Nussle says he's fiscally concerned about the nation's future, but also concerned about building the kind of economy the country needs for the future. He says it's short sighted to eliminate ethanol incentives outright. Not only would the Coburn amendment kill investment in cellulosic biofuels and American jobs, Nussle says it would result in higher prices at the gas pump and increasing the nation's dependence on foreign oil.

Renewable Fuels Executive Vice President Christina Martin is urging people to contact their Senators and tell them to vote no on the bill.

"American ethanol employs some 76,000 American farmers and workers directly in producing ethanol or providing goods and services to ethanol producers," Martin said. "The economic activity from ethanol supports more than 400,000 jobs. That's a lot of economic activity that could be harmed by Senator Coburn's attempt to end the VEETC."