5-4 IAN Diane Feinstein

Time to End Irresponsible Ethanol Subsidies By U.S. Senator Dianne Feinstein (D-Calif.)

If the cattle industry received the same government support as the ethanol industry, ranchers would get generous subsidies to raise their stock, the American public would be mandated to consume certain amounts of beef and most foreign cattle would carry punitive import tariffs.

 Of course this is not the case. Ethanol is the only industry that benefits from such a triple crown of government intervention: its use is mandated by law, oil companies are paid by the federal government to use it and it is protected by tariffs. I believe it is time to end this outdated policy that is fiscally irresponsible, environmentally unwise and makes our country more dependent on foreign oil.

 Last month, she introduced legislation to repeal the 45-cent-per-gallon corn ethanol subsidies and reduce the ethanol tariff. Her bill would eliminate a subsidy that costs taxpayers nearly $6 billion a year She would continue to support producers of non-corn, second-generation “advanced biofuels” that are more environmentally friendly and non-market distorting.

 The practice of subsidizing the blending of corn ethanol into gasoline is fiscally indefensible. If this policy were to remain in place, the U.S. Treasury would pay oil companies at least $31 billion to use 69 billion gallons of corn ethanol over the next five years, even though the Federal Renewable Fuels Standard already requires those companies to use ethanol. It makes no sense, and we cannot afford to pay the oil industry to obey the law.