Restaurants, farmers square off over ethanol

National restaurant chain companies have targeted ethanol tax subsidies for slashing by the powerful group of lawmakers tasked with reducing the national deficit by at least $1.5 trillion.

That push will likely be met with resistance from farmers' groups who have lobbied for government support of the biofuel.

The anticipated struggle is emblematic of what several Washington observers predicted for the “supercommittee”: The new deficit-reduction panel would become a battleground for competing private interests to lobby against each other’s favorite government programs.

In a letter sent Thursday to the supercommittee, 16 different restaurant companies, under the banner of the National Council of Chain Restaurants, said federal help for ethanol should be on the chopping block to help pare down the country's debt.

ADVERTISEMENT
"Long-term food commodity inflation is a concern for all consumers, especially in this time of continued economic uncertainty. Please support an end to the [Volumetric Ethanol Excise Tax Credit] and the ethanol import tariff and oppose the creation of new taxpayer subsidies for conventional ethanol infrastructure," the letter states.

Popular restaurant chains signed onto the letter, including Cracker Barrel Old Country Store, Domino’s Pizza Inc., McDonald’s Corporation and the Wendy’s Company.

A spokeswoman for Growth Energy, a trade association for ethanol producers and users, took exception to the letter, calling it “two steps backward.”

“Instead of moving forward and focusing on ways to address some of our nation’s most pressing economic issues, these groups are taking two steps backward by focusing on a policy that is rapidly becoming obsolete,” Stephanie Dreyer, a senior public affairs associate with the business group, said in a statement.

“Growth Energy Members have promoted a plan, for more than a year, that would modernize current ethanol policies to advance this nation’s renewable energy industry by investing in infrastructure and next generation ethanol to create good paying jobs and strengthen our energy security,” she said.

The restaurant chains estimate the ethanol tax credit costs $6 billion a year.  The Senate voted earlier this year to immediately end the tax credit, and it is set to expire by the end of this year.

Other industry sectors have felt under threat from the supercommittee as it gets to work and have launched lobbying campaigns to protect their interests.

The Aerospace Industries Association launched a campaign this week, entitled “Second to None,” in order to protect funding for the defense industry as lawmakers look to the Pentagon for budget cuts.

Others are being targeted.

Last month, 12 environmental groups, such as the League of Conservation Voters and the National Audubon Society, wrote to congressional leaders urging them to have the supercommittee cut tax subsidies for the oil and gas industry.

The supercommittee has been assigned to find at least $1.5 trillion in federal budget savings by November 23. A failure to reach agreement will trigger across-the-board spending cuts that would be unpopular with both parties.