The pointless ethanol subsidy

June 16, 2011

On Tuesday, the Senate rejected a measure that would eliminate
the tax credit given to fuel refiners who use corn-based ethanol. The vote is being reported largely as a signal that Senate
Republicans--who were responsible for most of the "yea" votes--are willing to
consider revenue increases (at least those that come from eliminating tax
breaks for things they never liked to begin with).

Also significant, however, is that most Democrats voted "nay."
Environmental groups oppose corn ethanol, and with good reason: along with
driving up food prices by propping up corn, the biofuel uses more fossil fuels
at the production end than it saves at the pump.

The politics of ethanol are more regional than partisan: if you represent
a state that produces a lot of corn--or have an eye on the White House, the
road to which begins in Iowa--it's hard to be anti-ethanol. Notably, some of
the Republican presidential candidates have come out against ethanol subsidies anyway.
It's past time for President Obama--whose days as a Midwestern legislator and
presidential-primary candidate are behind him--to join them.

As for Senate Democrats, some of them blame their votes Tuesday on procedural issues
related to the timing and control of the vote. Majority leader Harry Reid said
last night
that there will be another vote on ethanol subsidies today. If
that can't get 60 votes, the next
will be negotiating with pro-ethanol senators.

One way or another, the Democrats need to join Republicans in
voting to eliminate this tax credit. The $6 billion this would save won't solve
our budget crisis, but spending it isn't helping anything.

UPDATE: The anti-ethanol-subsidy amendment passed today. Though it still has some major hurdles to jump, not the least of which is the president's promised veto.



Ethanol production is likely to continue to soar over the next several years, since the Energy Independence and Security Act of 2007 (a DEMOCRAT initiative presided over by Boss "drain-the-swamp" Pelosi) requires 36 billion gallons of annual renewable fuel use by 2022, of which, ethanol from cellulosic feedstocks is mandated to be at 16 billion gallons a year.

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