ANNOUNCED AS TEMPORARYNo
The U.S. Senate voted on June 16, 2011 to repeal the ethanol subsidy and the tariff on imported ethanol during debate over the 'Economic Development Revitalization Act' (S.782). There still remain several hurdles that the initiative will need to clear before it becomes law.
The amendment, sponsored by Senator Dianne Feinstein (Democrat of California), was approved by an impressive bipartisan vote of 73-27. Officially known as the 'volumetric ethanol excise tax credit,' (VEETC) the subsidy is estimated to cost approximately $6 billion per year.
The amendment would eliminate the 45˘/gallon subsidy to refiners and 54˘/gallon tariff on imported ethanol, making it duty-free under a new subchapter XXIII of the Harmonized Tariff Schedule (HTS 9823.01.01). The provision would be in effect immediately upon enactment of the bill into law. Shortly after the Senate took this vote the White House released a statement opposing the amendment and threatening a veto.
The Feinstein language may never reach the president's desk. Because the amendment affects tax and tariff issues, it is expected to be challenged as an unconstitutional violation of House privilege. Under the Constitution, all tax and tariff measures must originate in the House of Representatives.
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