However, one particular tax-credit issue – that involving the extension of the Volumetric Ethanol Excise Tax Credit (“VEETEC”) which is otherwise doomed to expire at year’s end – has failed to receive the attention it should, even though it is a tax credit that makes sense for farmers, ethanol producers, and consumers alike.  

Moreover, given the large number of jobs currently dependent on ethanol production, and with national unemployment hovering near double digits (and higher in many metropolitan areas), failing to extend this tax credit would cause further disruptions to an already dismal employment picture for 2011 and beyond. At a time when our nation needs to focus on reducing our dependence on foreign energy sources, removing a tax provision that actually helps foster domestic-based energy, makes little, if any, sense.

So why is the question of extending a tax credit that helps both business and consumers not yet on the front burner of issues the ongoing lame-duck session of Congress is to consider in the waning days of this 111th Congress?  

Part of the problem is that so-called environmental watchdog groups, such as the Natural Resources Defense Council, are fighting the VEETC extension because they just don’t like corn-based ethanol; considered by them to harm the environment. Despite the fact that conservative watchdog groups normally would be chomping at the bit to debate such assertions by those they consider environmental extremists, VEETC has failed to gain sufficient traction with some conservative groups. This appears to be the result of a natural, but not always well-placed aversion to federal “subsidies” for certain industries or producers.  

The VEETC, however, is far different from traditional government subsidies, such as those that skew the markets for certain agricultural products like tobacco. VEETC is in every relevant sense a tax credit, designed simply to reduce taxes paid by certain producers of a certain product -- in this case, corn-based ethanol. It is not a payment system artificially propping up an un-economic industry. Yet, unlike many other provisions in our federal tax code that provide benefits to the fossil-fuel industry, VEETC is saddled with an expiration date looming in one month. 

The biofuels industry, and the corn-ethanol industry in particular, are not without important allies on Capitol Hill.

The highly influential taxpayer watchdog group, Americans for Tax Reform, has advised the more than 200 members of Congress who are signatories to its “Taxpayer Protection Pledge,” that voting against extending VEETC could be considered a violation of their pledge. The head of the Renewable Fuels Association, Bob Dinneen, is well-regarded in the nation’s capital, and has been energetically promoting awareness of the employment and economic benefits of VEETC.  

The lame-duck session, with its emphasis on tax issues, offers a perfect opportunity to extend VEETC. It is relevant, timely, economically justifiable, and easily accomplished. Other than some fringe elements, it is difficult to understand much of the opposition to extending VEETC. Even if some might oppose the extension because they philosophically are averse to using the federal tax code in this manner, preventing this beneficial and timely tax credit from expiring at this juncture makes a great deal of sense. In fact, extending VEETC is the right move, at the right time, for the right reason.

Bob Barr was a Republican House representative from Georgia from 1995 to 2003.