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A test for the GOP: Ending ethanol subsidies Date published: 11/26/2010
WHEN NATIVE AMERICANS introduced the Pilgrims to corn, they intended it as something to eat. Now, 400 years later, we're stuffing it in our gas tanks and paying twice for the privilege. Once, of course, is at the pump, as we use gasoline sweetened with 10 percent corn-based ethanol. But the other time is through the $6 billion with which American taxpayers subsidize producers of the additive. That may seem like a drop in the bucket overall, but it's a benchmark issue: If Republicans are really committed to changing Washington and to free-market principles, ethanol subsidies will be allowed to expire. We're learning more about the downside of ethanol as time goes on. Its use was mandated by the 2005 and 2007 energy bills, and if the Obama administration has its way, those mandates will increase from 13 billion gallons this year to 36 billion gallons by 2022. Currently, gasoline must be 10 percent ethanol; the EPA wants to push that to 15 percent. But while stuffing corn in our gas tanks may usurp the use of those nasty fossil fuels, it isn't ideal. It isn't even environmentally sound. Ethanol mandates drive up the cost of corn, reduce the acreage used for other crops, increase costs to animal producers, and drive up food prices. Converting corn to ethanol requires a vast amount of water: Cornell University professor David Pimental puts that tab at about 8,000 gallons of H2O per gallon of ethanol. Thus, already stressed aquifers go dry. Finally, corn requires a high level of fertilization, which is why some environmentalists blame the dead zones in the Gulf of Mexico on increased acreage devoted to corn for ethanol. Right now, there is a 45 cents-per-gallon tax credit for blending ethanol with gasoline. This, along with other subsidies, costs U.S. taxpayers $6 billion a year. There's also a 35-cents-per-gallon tariff on imported ethanol, a trade barrier that is causing friction with Brazil, which would like to ship sugar-cane-based ethanol to the U.S. Why aren't the free traders in Congress choking over that one? All of these tax-fed measures are due to expire Dec. 31. All Congress has to do is nothing, and the black side of Uncle Sam's ledger will gain $6 billion. But ethanol producers are already lobbying for extensions. They claim that 160,000 jobs will be lost if the subsidies don't continue. A study by Iowa State University puts the number at more like 300. It's time for the GOP to prove it can rise above standard back-scratching politics and do the right thing: End the ethanol subsidies.
Republicans. Not that the Dems from the farm belt haven't been supporters also, but most of the Congressmen from the area are Republicans. And this represents a much bigger subsidy than a few ear marks. The structure of our federal system will make it hard to cut these things due to the out sized influence of rural interests. Same holds for defense where bases and plants make up an out sized proportion of rural and southern economies. Interest trumps rhetoric every time.
a federal subsidy at taxpayer expense to grow corn? The price of corn product has risen due to the large demand for the producr. So the taxpayer gets noodled r different ways...
encourage or to discourage any activity or product as long as it is truly good for the nation. It also must not be a massive give away. Ethanol is not good for the nation as a whole (yea, I know that is quite a decision) and the subsidy should be stopped.
before they went after these subsidies? There are dozens of
subsidies like Ethanol in the tax code that the two separate
balanced-budget commissions advocated removal as part
and parcel of getting to a balanced budget and to be
honest, I've not heard much support for doing that from
either side.
But we are never going to reach a balanced budget as long
as we have these subsidies....
I'd like t see an end to ALL of them and an end to as many
of these tax "breaks" also. We need to cap mortgages also.
The GOP doesn't have the majority in the House yet, but they could stop a filibuster. More to the point, if the party makes clear they have no interest in extending these, there are probably enough Democrats to block the extension on a straight up-and-down vote.
I became a Republican because the GOP was, and I hope is again, the party of limited government. This will tell me just how much work I and others still have to do internally make that hope more of a reality.
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