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Posted at 04:44 PM ET, 12/12/2011

Lawmakers call for repeal of ethanol subsidies


(Patrick Fallon - BLOOMBERG)

A bipartisan group of House members is calling for the elimination of ethanol subsidies as a deadline for renewing the tax credit looms at the end of the month.

In a letter to House Speaker John Boehner (R-Ohio) and Minority Leader Nancy Pelosi (D-Calif.) on Friday, 73 House members of both parties urged the leaders to “allow ethanol subsidies set to expire to do just that and to resist calls to expand or create new ethanol subsidies in the eleventh hour.”

Both the 45-cent-per-gallon tax subsidy for ethanol blenders and the 54-cent-per-gallon tariff on ethanol imports were renewed as part of the tax package approved by Congress during last year’s lame-duck session.

But support for the annual tax credit appears to be on the wane, as 34 Senate Republicans and six members of the Democratic caucus in June voted in favor of a measure sponsored by Sen. Tom Coburn (R-Okla.) to do away with the subsidy. While the measure fell short of passage, the fact that nearly three-dozen Republicans voted in favor of it was considered a symbolic turning point in the broader debate over tax reform.

Shortly after that vote, Sen. Lamar Alexander (R-Tenn.) said that he was planning to introduce legislation that would do away with a variety of energy tax subsidies.

In their letter, the House members wrote that the ethanol tax credit and import tariff “were not permanent in nature for a reason.”

“Congress anticipated the ethanol industry one day being sufficiently mature to stand on its own,” the lawmakers wrote. “It is difficult to make the argument that this day has not arrived. With widespread concern across a spectrum of issues including anti-hunger, fiscal, environmental, agricultural, good governance, and others, extending a billion dollar ethanol tax credit would appear out of the question and the prohibitive import tariff should be allowed to expire as well.”

The letter from the 73 House members – who range from Rep. Peter Welch (D-Vt.) on the left to Rep. Jeff Flake (R-Ariz.) on the right -- comes as both chambers are working toward an end-of-the-year compromise on extending a number of tax provisions including the payroll tax holiday, which thus far has been the focal point of the debate between the parties.

The full text of the letter is below.

December 9, 2011

Dear Speaker Boehner and Minority Leader Pelosi:

As the first session of the 112th Congress comes to a close, we urge you to allow ethanol subsidies set to expire to do just that and to resist calls to expand or create new ethanol subsidies in the eleventh hour.

The ethanol industry has benefited from a tax credit incentivizing production, an import tariff shielding it from competition, and a renewable fuels mandate creating demand. Both the volumetric ethanol excise tax credit and the prohibitive import tariff are set to expire at the end of this year. These benefits were not permanent in nature for a reason. Congress anticipated the ethanol industry one day being sufficiently mature to stand on its own. It is difficult to make the argument that this day has not arrived. With widespread concern across a spectrum of issues including anti-hunger, fiscal, environmental, agricultural, good governance, and others, extending a billion dollar ethanol tax credit would appear out of the question and the prohibitive import tariff should be allowed to expire as well.

In addition, we urge you to oppose efforts to create new or expand existing subsidies that benefit the ethanol industry in the waning days of this session. For example, there has been the suggestion that the renewable fuels standard be revised to allow corn-based fuels to qualify as an advanced biofuel. Taxpayers deserve to have the future of federal ethanol policy fully vetted under regular order, an opportunity that is unlikely in the last days of the session.

Sincerely,

Jeff Flake (AZ-6)

Joseph Crowley (NY-7)

Wally Herger (CA-2)

Earl Blumenauer (OR-3)

Bob Goodlatte (VA-6)

Pete Stark (CA-13)

Richard Hanna (NY-24)

Joe Courtney (CT-2)

James Lankford (OK-5)

Joseph Pitts (PA-16)

Pete Olson (TX-22)

Rob Woodall (GA-7)

Richard B. Nugent (FL-5)

David Schweikert (AZ-5)

Stevan Pearce (NM-2)

Judy Biggert (IL-13)

Cynthia M. Lummis (WY-At Large)

Paul C. Broun (GA-10)

Lloyd Doggett (TX-25)

Andy Harris (MD-1)

Paul A. Gosar (AZ-1)

Mike Pompeo (KS-4)

Michael M. Honda (CA-15)

Chellie Pingree (ME-1)

John Conyers, Jr. (MI-14)

Lois Capps (CA-23)

Adam Smith (WA-9)

Martin Heinrich (NM-1)

James P. Moran (VA-8)

Daniel E. Lungren (CA-3)

Trent Franks (AZ-2)

Jason Chaffetz (UT-3)

Loretta Sanchez (CA-47)

Tim Griffin (AR-2)

Benjamin Quayle (AZ-3)

John Campbell (CA-48)

Michael H. Michaud (ME-2)

James P. McGovern (MA-3)

Leonard Lance (NJ-7)

Dana Rohrabacher (CA-46)

Jim Matheson (UT-2)

Peter A. DeFazio (OR-4)

Tom Graves (GA-9)

Mike Quigley (IL-5)

Peter Welch (VT-At Large)

Zoe Lofgren (CA-16)

Steve Womack (AR-3)

Chris Van Hollen (MD-8)

Tom McClintock (CA-4)

Dennis Ross (FL-12)

Doug Lamborn (CO-5)

Linda T. Sanchez (CA-39)

Lynn A. Westmoreland (GA-3)

George Miller (CA-7)

Jim Costa (CA-20)

Charles W. Dent (PA-15)

Sandy Adams (FL-24)

David B. McKinley (WV-1)

John J. Duncan, Jr. (TN-2)

Mick Mulvaney (SC-5)

Scott Garrett (NJ-5)

Dennis A. Cardoza (CA-18)

Joe Baca (CA-43)

Ken Calvert (CA-44)

Howard Coble (NC-6)

Allyson Y. Schwartz (PA-13)

Phil Gingrey (GA-11)

Jackie Speier (CA-12)

James A. Himes (CT-4)

Mike Coffman (CO-6)

Mary Bono Mack (CA-45)

Jim Cooper (TN-5)

Raul R. Labrador (ID-1)

By  |  04:44 PM ET, 12/12/2011

 
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