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Your Tax Dollars Paying for "Dozens of Federal Subsidies"

As the Secretary of the U.S. Department of Agriculture "Secretary Tom Vilsack announced more federal subsidies for the industry," Taxpayers for Common Sense (TCS) "released a report detailing the variety of federal subsidies for biofuels like corn ethanol, the same day," according to this September 10, 2015 TCS press release.

The press release continued:

"In May, the USDA announced it was creating a $100 million grants program to subsidize ethanol blender pumps. Today’s announcement is the next step in that program. TCS awarded Sec. Vilsack the Golden Fleece award in July for providing this $100 million in taxpayer subsidies to pay for new gas station pumps that can dispense high-blend ethanol fuels. After an earlier attempt to fund blender pumps through another program, Congress explicitly forbid USDA from spending tax dollars from the program on blender pumps when it passed the 2014 Farm Bill.

“After more than 30 years of federal backing for certain biofuels such as corn ethanol, the federal government should be scaling back – not expanding – its role in subsidizing the long supply chain of biofuels production,” said TCS President Ryan Alexander.

"Today’s report from TCS, titled “Understanding Federal Subsidies for the Biofuel and Biomass Industries,” includes an overview of Federal Biofuels and Biomass Subsidies administered by various federal agencies, including the USDA, Department of Energy, Treasury Department, and the Environmental Protection Agency. The report catalogues dozens of programs and subsidies, including descriptions and dollars spent. Copies of the report can be found at taxpayer.net/biofuels.

“Biofuels have been sold as a tonic to achieve U.S. energy independence, reduce greenhouse gas emissions, and spur rural economic development,” continued Alexander. “They have not delivered on these promises, and more government subsidies is not the answer.”

TCS introduced the 21-page report this way:

"Since its creation of the domestic market for corn ethanol after the energy crisis of the 1970s, the federal government has nurtured and maintained the ethanol industry with a steady stream of subsidies. Biofuels and biomass sources were originally sold as a way to help achieve U.S. energy independence, reduce greenhouse gas emissions, and spur rural economic development. The federal government has propped up the biofuels and biomass industries – primarily the mature corn ethanol industry – through billions in subsidies, special interest tax breaks, taxpayer-backed loan guarantees, and a variety of other supports for blender pumps and other infrastructure. Biofuels enjoy a guaranteed market as their production is mandated by the federal government through the Renewable Fuel Standard (RFS).

"However, the next generation of biofuels and bioenergy has failed to meet its lofty expectations. Unintended consequences of increased corn demand have included higher food and feed costs, greater greenhouse gas emissions, and the conversion of millions of acres of native grasslands, wetlands, and other sensitive land to corn and other commodity crop acres. Biofuel and biomass subsidies have allowed the federal government to pick winners and losers, distorted energy and agriculture markets, and contributed to expansion and overproduction of certain types of bioenergy.

"After more than 30 years of federal backing for certain biofuels such as corn ethanol, the federal government should be scaling back – not expanding – its role in subsidizing the long supply chain of biofuels production. It’s time the biomass and biofuels industries survived without taxpayer support."

The report includes several helpful tables. For example, one table lists, by the program/fund name and corn-based biofuel project, the projects that are funded. Another table identifies the amounts of "woody biomass subsidies" for the years 2009-2013.

The report's introduction is here. TCS's biofuels resource page is here.

More importantly, use the following links to communicate with your members of Congress. They need to hear you growl, and you should know what their positions are on biofuels. And be sure to ask them what oversight they have personally been involved in that ensures biofuels are being used efficiently, economically, and effectively. Contact information is available at Thomas (use left-hand column). Taxpayers living in Virginia's Arlington County, can contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response, and tell them ACTA sent you. And kudos to Taxpayers for Common Sense for their continued efforts to ensure "budgets make sense."

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