Hoyer backs smaller tax credit for ethanol

House Majority Leader Steny Hoyer (D-Md.) on Wednesday offered support for lowering subsidies for ethanol, which are being blamed by some for an international food crisis.

In a press conference, Hoyer said he supports a move by House and Senate conferees on the farm bill that would lower the tax credit ethanol refiners receive from 51 cents per gallon to 45.

{mosads}“I think the conferees have recognized that problem and have addressed the issue that the food crisis has made clear,” he said. “I think you will find there's been a modification of existing policy.”

Asked if he meant he supported decreasing subsidies for ethanol, he said, “Yes.”

Negotiators from the House and the Senate agreed upon a farm bill deal last week calling for approximately $280 billion in agricultural spending over five years, although they still need to hammer out some details.

While they reduced the tax credit for ethanol, they also extended a tariff on ethanol that prevents cheap, sugarcane-based fuels from Brazil and other countries from being competitively sold in the U.S.

Ethanol critics have linked U.S. biofuel policies to an international food crisis that has led to riots in several countries. Corn growers and other supporters of ethanol charge that high oil prices are more to blame for the high food prices.

Sens. Kay Bailey Hutchison (R-Texas) and John McCain (Ariz.), the presumptive GOP presidential nominee, have called for fewer regulations requiring ethanol use in corn production.

But President Bush said Tuesday that ethanol-based crop production is only a small factor in the increase in prices, arguing that U.S. ethanol use can help reduce the country’s dependence on foreign energy sources.

"[I]t's in our national interest that we — our farmers — grow energy, as opposed to us purchasing energy from parts of the world that are unstable or may not like us,” he said at a White House press conference.