Hello, I'm Mark Pearson. Stocks traded higher on Wall Street Friday despite a weak report on the U.S. labor market.
While private employers added 64,000 jobs in September, government layoffs resulted in a 95,000 position reduction in total U.S. payrolls. Despite the cuts, the nation's unemployment rate was unchanged at 9.6 percent.
Wall Street took the day's news in stride, as the Dow Jones Industrial Average climbed above 11,000 Friday for the first time since early May.
And the Federal Reserve reports consumer borrowing declined by $3.3 billion in August as consumers cut back on credit card use for the 24th consecutive month.
While less debt is often prescribed to treat a host of financial maladies, reduced use of credit by consumers weighs heavily on the economic recovery.
But there is one kind of credit that continues to be popular in rural America... a 45-cent per gallon tax credit for ethanol blenders. And a coalition of farm state governors is poised to advocate on its behalf.
Analyzing information from a draft letter, DTN reported this week the Governors Biofuels Coalition will ask ethanol related tax provisions be included in any energy tax bill considered by Congress after the November 2nd elections. The coalition is also requesting more investment in blender pumps and ethanol infrastructure as well as rewards to ethanol producers that reduce their carbon footprint.
Scheduled to be sent to senate leaders next week, the letter specifically asks for a one-year extension of the volumetric ethanol excise tax credit "to allow time to transition from the blenders' credit to a refundable credit available only to domestic biofuel producers for a period of five years."
The letter, signed by Iowa Governor Chet Culver, who chairs the Governors Biofuels Coalition, and Indiana Governor Mitch Daniels, the coalition's vice-chair, affirms the importance of the domestic biofuels industry to their state economies which "keeps billions of dollars at work in our states instead of paying for imported oil."
In the letter the governors also wrote:
"We believe these improvements will effectively open the market for biofuels, reduce taxpayer costs by billions of dollars, and enable the domestic biofuels industry to compete on a more level playing field with petroleum transportation fuels."
The blenders' credit is set to expire at the end of the year. According to economists at the Farm and Agricultural Policy Research Institute, if current tax policies are allowed to expire the volume of corn processed into ethanol could be reduced by 485 to 540 million bushels per year. In turn, farmers could see a reduction in corn prices ranging from 11 to 20 cents per bushel.