Wednesday was a difficult day for The American Independent News Network, which is the larger entity that operates The Iowa Independent. Our chief executive and founder announced two of our sister sites would close and their content would be moved to The American Independent.
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The Iowa Senate will remain under the control of a slim 26-25 Democratic majority when it reconvenes in January 2012.
Citing a new report by the Congressional Budget Office that corn-based ethanol subsidies cost taxpayers more than $7 billion a year, U.S. Sen. Jeff Bingaman, D-N.M., voiced support Thursday for cuts to the ethanol tax credit program.
Describing corn ethanol as “a mature technology whose market share is protected,” Bingaman said Congress should scrutinize the subsidy and “weigh all factors, including the credit’s very high cost to taxpayers,” before again extending it.
Ethanol tax credits pay oil refineries to blend gasoline with ethanol. After three decades of subsidies, 10 percent of U.S. gasoline contains ethanol.
The CBO report added economic concerns to mounting environmental and health concerns about ethanol as a fuel additive. The report “provides further evidence that our nation’s biofuels tax incentives might not be appropriately calibrated,” Bingaman said.
Gov. Chet Culver released a statement Thursday criticizing the CBO report.
“This CBO report is deeply flawed because it fails to take into account the economic benefits to our farmers who grow the corn and soybeans that go into these clean, renewable biofuels,” Culver said. “The report also gives insufficient consideration to the national security benefits of cutting free from our dependence on foreign oil.”
The tax credit program already faced new scrutiny in Congress. The House Ways and Means Committee is now debating a 20 percent (nine cents per gallon) cut in the ethanol tax credit, according to The Associated Press.
Bingaman’s support for cuts is a blow to industry’s hopes for the subsidy. A longtime supporter of biofuels, he is chairman of the powerful Senate Energy and Natural Resources Committee.
“According to the Congressional Research Service, the VEETC (ethanol tax credit) will cost the American taxpayer $7.6 billion this year alone,” Bingaman said. “That high price tag makes the VEETC by far our Tax Code’s largest subsidy for renewable energy. And this annual price tag comes on top of the $41.2 billion in current dollars that U.S. taxpayers have already spent since 1980 on tax-based subsidies for ethanol.”
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