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Time to end the mother of all corporate welfare: ethanol subsidies

November 12, 2010 07:19

This subsidy may be the most illuminating when it comes to who is going to put the best interests of the country first or continue to line their pockets at the expense of generations of Americans. Both parties are on the take.

IBD Editorials 11/11/2010

Ear (Of Corn) Marks

EXCERPTS:

If we’re serious about cutting wasteful spending and reining in government, the abolition of subsidies for ethanol production and the ending of mandates for its use would be a good place to start.

Ethanol is the perfect tax-spend-and-elect mechanism.

Ethanol currently receives a 45-cents-a-gallon tax credit when blended with gasoline and is protected by a 54-cents-a-gallon tariff on ethanol imported from countries like Brazil. If, as politicians and environmentalists claim, ethanol is needed to protect the environment and not just political careers, we should eliminate the foreign tariff. Brazilian ethanol is made from sugar, not corn. Corn is grown in Iowa, and Brazilians can’t vote in our elections.

Politicians on both sides of the aisle benefit from the ethanol goodie bag.

The lame-duck session will undoubtedly see an attempt at a short-term extension of the ethanol subsidies with political demagoguery about saving jobs, protecting the environment, promoting green energy and all that.

“Producing ethanol for use in motor fuels increases the demand for corn, which ultimately raises the prices that consumers pay for a wide variety of foods at the grocery store, ranging from corn-syrup sweeteners in soft drinks to meat, dairy and poultry products,” says the Congressional Budget Office.

A report by the Paris-based International Council for Science says clearing land for the production of biofuels has aggravated rather than ameliorated global warming. It releases nitrous oxide as well as CO2. Nitrous oxide is said to trap heat at a rate 300 times greater than an equal amount of CO2.

Even some environmentalists have gotten wise to the ethanol scam. The Environmental Working Group and five other groups not long ago came out against a further bailout. Subsidies “for corn-based ethanol,” they said, “have produced unintended, yet potentially catastrophic environmental consequences, with little or no return to taxpayers in energy security (or) protection from global warming.”