Causing Confusion

Tuesday Jun 21st, 2011 37 Views Line on Agriculture

Causing Confusion. I’m Greg Martin with today’s Line On Agriculture.

There has been a lot of confusion lately regarding the production of ethanol and the taxes and incentives around it. Recently the Senate has gotten involved and their stand is unclear as its decisions on proposed amendments last week were driven by other unrelated issues. Bob Dinneen, president and CEO of the Renewable Fuels Association said that while lawmakers on Thursday approved an amendment that would scrap the ethanol tax incentive program, they voted down another amendment that would have placed restrictions on federal support for ethanol blender pumps. Matt Hartwig - Renewable Fuels Association Chief of Staff - says the vote is mostly symbolic.

HARTWIG: First of all it doesn’t mean anything. This whole week about the debate around ethanol really has little to do with ethanol and even less to do with true energy policy. This was about politics; this was about political theatre. In the end the vote yesterday on that amendment was for an amendment that is unconstitutional.

Hartwig calls it unconstitutional because the measure takes action the Senate can’t take. That is - being the first chamber of Congress to institute revenue raising measures.

HARTWIG: Getting rid of VEETC would raise taxes on gasoline by 4 1/2 cents overnight as Senator Coburn and Senator Feinstein have proposed and in the end the vote means nothing. VEETC is still scheduled to expire at the end of the year and I think it’s likely we will see some sort of reform of VEETC before we see it repealed immediately as the Senator from the oil patch would like.

Hartwig says the vote was a hypocritical move on the part of some Senators.

HARTWIG: When they were asked to end taxpayer handouts to big oil, they said how dare you pick on one industry. How dare you single out one industry to shoulder the responsibility of balancing the budget. Yet now just a few weeks later they have no problems doing that to America’s farmers and ethanol producers.

He says the debate was never about sound energy policy for the country.

HARTWIG: Were this about policy, then the proposal put forward by Senator Klobuchar and Senator Thune would have gotten more attention and more serious debate.

This issue is far from over and we’ll keep an eye on what will happen in the next round. That’s today’s Line On Agriculture. I’m Greg Martin on the Ag Information Network.