Senate Votes to Repeal Ethanol Subsidy
June 17, 2011 2:00 PM
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39% of all corn produced in the U.S. goes to ethanol production
House to vote next
Lawmakers in Washington are working hard to write and pass laws that would have fuel efficiency standards in the U.S. changing drastically in coming years. While some in Washington support the new standards for vehicle efficiency, others oppose the standards. Along with mandating better fuel economy across a carmakers fleet, Washington is also seeing green and renewable fuel alternatives for vehicles.
In the U.S., ethanol has been added into the fuel we run in vehicles for years. Ethanol is as high as 10% in fuels today and some that are against ethanol, which is derived from corn, claim that the biofuel is increasing the price of some food items in America. A report published by the GAO claims that the use of ethanol has driven the cost of some food items up as much as 20%.
With all of Washington in cost cutting mode in an effort to shore up the federal budget lawmakers are looking at everywhere money can be saved. One place that some in the Senate want to save money is by repealing the subsidy on ethanol. The
Thursday 73-27 to end a $0.45 per gallon tax credit on ethanol-blended gasoline starting on July 1. According to those that support the repeal, the subsidy cost taxpayers $5.6 billion last year.
Growth Energy, and ethanol association, CEO Tom Buis said, "The Senate missed an enormous opportunity to take real action on deficit reduction and energy policy when it failed to put oil subsidies and giveaways to the same test as ethanol."
On the other side of the coin, Kate McMahon coordinator of biofuels campaigns for Friends of the Earth said, "Senators scored a win for the public and for the environment by voting to end this $6 billion giveaway." She continued saying, "[the Senate delivered a message] that the ethanol industry's days of living high off the taxpayers' hog have come to an end."
The effort to end the ethanol subsidy now goes to the House for voting. White House spokesman Jay Carney says that the Obama administration supports a reduction in the ethanol subsidy, but does not support a full repeal. Some claim that 39% of the corn produced in the U.S. is currently going into fuel tanks. With the costs to reach the
regulations for fuel economy reaching nearly $10,000, some automakers are calling for the removal of ethanol from gasoline. Ethanol is renewable and greener than petroleum fuel, but reduces fuel economy.
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6/17/2011 2:40:21 PM
I am surprised that the administration is going along with this. Especially when considering that the Obama administration roots are in Illinois, where the corn growers have a large presence, and stand to lose out bigtime on inflated corn prices with the rollback of this subsidy.
6/17/2011 3:37:25 PM
Three branches of government. The Senate is in the legislative branch, the President is in the executive branch. The senate do not need to care about what the Obama administration thinks about a particular bill. If they have enough support for a bill, they can override the President's veto.
I don't know what the Obama administration feels about this, they may even be supporting it as well. However, the fact that the senate voted for something doesn't mean that it is in line with what the White House wants.
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