Washington - US Senator Robert Menendez (D-NJ) today voted in favor of ending ethanol subsidies and hailed the vote as a watershed moment for the ongoing negotiations to reduce the deficit. The Ethanol Subsidy and Tariff Repeal Act, offered as an amendment on the Senate floor, passed with a strong bipartisan vote of 73-27.

Eliminating the 45 cent per gallon subsidy to blend ethanol into gasoline will save the Treasury nearly $6 billion per year, while also alleviating inflationary pressure on food prices. The USDA estimates that 40% of this year's corn crop will be used for ethanol.

"This is a landmark vote and even if this provision does not pass the House, it is a signal that those negotiating the debt ceiling must heed the bipartisan majorities in the Senate that want to end ethanol subsidies and end oil subsidies for the Big 5 oil companies," said Menendez. "This industry has a mandate requiring the use of their product, a subsidy, a protective tariff, and even gets help from subsidies for corn. We simply cannot afford to prop up this industry any longer."

Before the vote, Menendez took to the floor in support of the legislation. Below are his remarks as prepared for delivery and a You Tube video:

Menendez Remarks on Ethanol

M. President, I rise to speak in favor of the Feinstein amendment. I am a proud cosponsor of this proposal because it will save us money, reduce food prices and do so in a responsible manner.

M. President, ethanol enjoys truly unprecedented support from the federal government.

First there is the Renewable Fuels mandate that requires ethanol to be blended into gasoline.

Second, there is a 45 cent per gallon subsidy to blend ethanol into gasoline that is costing the Treasury nearly $6 billion per year.

Third, there is a 54 cent per gallon tariff on imported ethanol protecting the domestic industry from any serious competition.

And to top it all off the federal government spends billions every year to subsidize the growth of corn for ethanol.

In a time of fiscal constraint we simply cannot afford to prop up an industry with such enormous supports.

And these supports are not just costing taxpayers money, but they are also causing food prices to rise and harming our environment.

The USDA estimates that 40% of this year's corn crop will be used for ethanol. This is raising grain prices worldwide, especially hurting the needy.

For these reasons, the Feinstein amendment has the support of taxpayer rights groups, religious groups looking out for the needy, budget hawks concerned about our deficit, livestock growers who use grain as feed, the grocers and restaurants who are seeing food prices increase, and the environmental community who understand that corn ethanol requires enormous amounts of fossil fuels to be produced.

My support for the Feinstein amendment is not just because it is the right thing to do for our country and our federal budget, but because it is the right thing to do for my home state. New Jersey has over 120,000 flex fuel vehicles, but does not have a single E85 ethanol pump in the entire state. 120,000 cars that are built to allow automakers to game fuel economy standards but may never see a drop of E85 fuel.

I know that this issue is important to our friends in the Midwest, but ethanol producers already have a guaranteed market for their product as a result of the federal mandate. Now we have an opportunity to help families across the country by ending this failed ethanol policy and providing relief both in terms of their taxes and their food prices.

For these reasons, I will be voting in favor of the Feinstein Amendment and urge my colleagues to do the same.

I also think this vote is important for the larger debate over the deficit.

Our friends on the other side of the aisle have said that revenues cannot be part of the strategy to reduce the deficit.

Well I think this vote and the one earlier this week, in which 34 Republicans voted to end these wasteful ethanol tax breaks, shows that there is bipartisan support for cutting wasteful tax subsidies and that these revenue expenditures must be part of any solution on the deficit.

Oil Subsidies

The first place to start in terms of tax expenditures is oil subsidies. A bipartisan majority of 52 Senators voted recently to end these hand outs.

If these 34 Republicans come into the fold, we could work together to make real progress.

Oil Companies do not need these subsidies. With oil trading at nearly $100 per barrel they have all the incentive they need.

By cutting these subsidies we can cut the deficit by $21 billion.

These companies are projected to earn up to $144 billion this year. If they can simply live with a mere $142 billion, then they could do their share to reduce the deficit without raising gas prices.

It is time we come together across party lines, end wasteful tax subsidies, and lower the deficit. This vote is an important first step and I think should be combined with ending oil subsidies to get us on the path to a balanced and bipartisan solution.

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