A bipartisan ethanol reform deal may not make it into current debt limit legislation, a vehicle that was hopeful for the ethanol industry to reduce its tax support by two-thirds and redirect the remaining one-third of savings into funding next generation biofuels and infrastructure needs to help ethanol be more competitive with oil.
Earlier in July, Sen. John Thune, R-S.D., joined with Sens. Diane Feinstein, D-Calif., and Amy Klobuchar, D-Minn., to forge a deal to end the blenders’ credit.
It was crucial that for the ethanol industry to gain the ability to redirect funds, the end of VEETC would have to occur before it expires at the end of 2011. By making the change midyear, the agreement captures the value of what would have been paid out in VEETC for the remainder of the year, starting Aug. 1, and redirects some of those savings into other areas, including deficit reduction and opening the market with infrastructure investments.
Thune told the Daily Republic that he sees little hope that the proposal will get a hearing or a vote, let alone pass. After the agreement was announced, ethanol industry proponents were hopeful the deal could find its way into debt limit discussions because it included savings that could be used to pay the deficit.
However, because none of the current debt-ceiling proposals include any plans to close tax loopholes or raise taxes, also known as a tax title, the ethanol proposal cannot be attached. “We had hoped to be able to hitch a ride on whatever the big debt package was going to be. We assumed there would be a tax title in that. That unraveled," Thune said in the newspaper.
Chris Thorne, spokesperson for Growth Energy, said, “It is unfortunate that while seeking to negotiate a deal to raise the debt ceiling, the House of Representatives did not include the Thune-Klobuchar-Feinstein ethanol reform agreement, which would have saved American taxpayers $1.3 billion this year.”
Thorne said it’s a little early to “write the obituary for the ethanol agreement” with nothing signed, sealed and delivered for Presidential approval. “We will continue to advocate for passage of this compromise wherever we can, whether in the debt deal or another legislative vehicle we may yet see down the road,” he said.
Policy is one of the most important issues facing farmers today, but often the most difficult to digest. Jacqui Fatka has a passion to decode the often difficult world of agricultural policy into terms understandable for today's ag players.
Fatka joined the Farm Progress team as E-Content Editor in August 2003 after graduating from Iowa State University. Prior to full-time employment with Farm Progress, she interned at Wallaces Farmer magazine, Iowa Sen. Chuck Grassley's press office and the Iowa Pork Producers Association and freelanced for National Hog Farmer. She also worked as a public relations consultant with Iowa Industries for the Future, an effort to bring together major players in the biorenewables industry.
Currently Fatka is a staff editor at a sister publication, Feedstuffs. For Farm Futures she regularly tells the story of ongoing agricultural policy changes. Her byline can also be found on management profiles.
Fatka grew up on a grain and livestock farm near Atlantic, Iowa. She currently lives in central Ohio with her husband Eric, and their three children - Josiah, Spencer and Avonell.
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