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Big Corn Eats GOP
IBD Editorials ^ | June 14, 2011 | Staff
Subsidies: How is it that the party loudly proclaiming how the government shouldn't "pick winners and losers" could only manage to get 34 senators to oppose one of the most egregious examples of federal industrial policy?
On Tuesday, the Senate rejected an amendment sponsored by Tom Coburn, R-Okla., to end the $6 billion in tax subsidies plus the import tariffs that have given rise to Big Ethanol. The measure got just 40 votes, six of them from Democrats.
The picture doesn't get much better at the GOP presidential candidate level, where for every critic of the subsidy there's a Newt Gingrich and Mitt Romney extolling its virtues.
Even Coburn's bill would have been just a modest first step. As he has put it, ethanol enjoys "a triple crown of government intervention: its use is mandated by law, it is protected by tariffs and companies are paid by the federal government to use it."
But while his bill would end two of these — the 45-cents-a-gallon tax credit and the 54-cents-a-gallon import tariff — it would leave in place the equally awful Renewable Fuel Standard, enacted under President Bush in 2005 and expanded in 2007, which mandates ever-increasing amounts of ethanol and other renewable fuels in gasoline.
Ending this madness should be a no-brainer. In fact, you'd be hard-pressed to find another public policy that has so utterly and completely failed to live up to any of its promises (with the possible exception of President Obama's stimulus).
Expanding ethanol use was supposed to lead to greater energy independence. But oil imports have climbed right along with the sevenfold increase in ethanol production.
