Categorized | Energy

Appropriations and Duplicative Ethanol Subsidies

Photo of Mitch McConnellToday, Senate Minority Leader Mitch McConnell announced his support for eliminating government programs identified in a recent Government Accountability Office report.

Senator McConnell said,

“I can’t imagine anyone in the Senate voting against a bill that would return to taxpayers money that we’re wasting on the bloated and duplicative programs outlined in this report.  Programs which, as ABC put it, are chewing up billions of dollars in funding every year. It would be an embarrassment and a double indictment of Congress to not act on this.”

One of the programs Senator McConnell is supporting the termination of is the Volumetric Ethanol Excise Tax Credit (VEETC) which is a 45 cent-per-gallon tax credit given to companies including many of the world’s largest and most profitable oil companies as an enticement to buy and mix ethanol with gasoline.

The GAO concluded that this subsidy was duplicative with an Energy Policy Act (2005) mandate to requires a certain amount of renewable fuel to be included in transportation fuels.

The tax credit will cost taxpayers $5.7 billion in subsidy paid to oil companies in 2011, with that cost growing to $6.75 billion by 2015.

In 2010, Senator McConnell had cosponsored the Reid-McConnell Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 which extended the tax credit.

GAO concludes that ‘the ethanol tax credit is largely unneeded’ and apparently Senator McConnell now agrees.

So do I.

This post was written by:

- who has written 17 posts on dotWild.

Tim Male is Vice President for Conservation at Defenders of Wildlife. Tim directs a number of Defenders’ conservation policy programs, including Habitat and Highways, Conservation Planning, Federal Lands, Oregon Biodiversity Partnership, and Economics.

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dotWild is the blog of scientists and policy experts at Defenders of Wildlife, a national, nonprofit membership organization dedicated to the protection of all native animals and plants in their natural communities.