Senate defeats vote on extending the Volumetric Ethanol Excise Tax Credit

The U.S. Senate recently defeated a vote on a package of tax policy extensions that included a one-year extension of the Volumetric Ethanol Excise Tax Credit.
The extension would have included a 20% reduction of the credit from current levels to $0.36 per gallon. In response to this, a multi-industry coalition representing the food industry, animal agriculture, environmental groups and budget watchdogs released a statement showing their support for the elimination of the credit extension. "The ethanol tax credit should be allowed to expire on schedule at the end of 2010," said George Watts, president of the National Chicken Council. "In this period of huge deficits, there is no justification for the government's losing billions of dollars in tax revenue to prop up an industry that already has a market required by law."
The implied reduction of the credit isn't enough, according to the coalition, though it is a start. "A reduction in the corn ethanol tax credit is a small step in the right direction for animal agriculture and America's taxpayers," said J. Patrick Boyle, president and CEO of the American Meat Institute. "Burning a substantial portion of our food and feed as fuel is not a sustainable answer, in the long term, to solving this nation's fuel needs.  Continuing to divert a significant portion of our corn crop into our fuel tanks will continue to increase costs for the meat and poultry industry and will result in higher food prices for consumers."
The coalition plans to keep a close eye on further developments regarding the tax credit.