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Coburn Bill Would End Ethanol Subsidy (Mar 09, 2011)

U.S. Sen. Tom Coburn (R-OK) introduced a bill Wednesday that would appeal the Volumetric Ethanol Excise Tax Credit (VEETC).

The so-called "blenders tax credit" provides a $0.45-per-gallon tax credit to oil companies who blend ethanol with gasoline. The original, $0.51-per-gallon tax credit was created in 2004, but lowered to $0.45-per-gallon in 2009. A report released last week by the non-partisan Government Accountability Office (GAO) called the tax credit “largely unneeded today to ensure demand for domestic ethanol production.”

"The ethanol tax credit is bad economic policy, bad energy policy, and bad environmental policy," Coburn said. "The $6 billion we waste every year on corporate welfare should instead stay in taxpayers pockets."

The state’s junior U.S. Senator and well-known deficit hawk co-sponsored the legislation with U.S. Sen Ben Cardin (D-MD).

"Rather than underwriting ethanol subsidies that are causing foodprices to skyrocket, we should be supporting American innovation in more sustainable althernative fuels," Cardin said.

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