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Ethanol tax credit vote could be delayed until 2011

DANIEL LOOKER 09/28/2010 @ 11:20am Business Editor

Senator Chuck Grassley (R-IA), shared his view of how a Republican takeover of Congress might affect agriculture Tuesday. He sees little change in farm policy in the agriculture committees, more support for trade agreements and more emphasis on existing tax credits for ethanol and biodiesel than on trading of energy offsets.

Tax credits are expected to come up in a lame duck session in November and December after the election but before new members of Congress are seated next year.

But Grassley told reporters Tuesday that Republicans might take the view that they could wait until January of next year to deal with tax issues, when they’re in the majority, if they do as well as expected in November.

That would mean that the 45 cent-a-gallon tax credit for ethanol would expire this year without being renewed, a fate similar to what happened at the end of 2009 when the $1 a gallon biodiesel tax credit expired without being extended. The biodiesel credit still hasn’t been renewed.

Grassley said that he hopes that doesn’t happen. Instead, he hopes that while Democrats still control Congress in late 2010, that “for the good of the country,” they’ll bring expiring tax credits to a vote.

More than 20,000 jobs in biodiesel have been lost because of the expired tax credit and more than 100,000 jobs in ethanol are at risk if the tax credit expires at the end of this year.

“Uncertainty about tax policy has been detrimental to getting unemployment down,” Grassley said.

In the area of energy policy, Grassley said that he believes his party will prefer to put more emphasis on existing tax credits and renewing those than on the kind of offsets that have been proposed by Democrats in the Senate and already passed in the House in a climate change bill.

Farm policy won’t change much, he said.

“If Republicans take control of the Congress, particularly the Senate, I don’t think it would affect agricultural policy a lot,” he said.

Republicans would be much more supportive of approving free trade agreements with Colombia, Panama and South Korea, he said.

“I think it might give the President a little more backbone to move ahead,” Grassley added.

 

 

 

  

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Job Number is Overblown 09/29/2010 @ 9:12am Your article states that "more than 100,000 jobs in ethanol are at risk if the tax credit expires at the end of this year," based on overblown figures from the RFA, which have been widely discredited. Recent, independent analysis by Bruce Babcock of Iowa State University has found that at most 400 jobs could be lost if VEETC expired. At a price tag of close to $6 billion each year, these tax credits are quite expensive for 400 jobs. I'm sure we could invest this money much better - tens of thousands of teachers and fire fighters, perhaps?

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