No on ethanol
The House Democratic caucus Thursday turned thumbs down on the tax deal President Obama cut with Republicans. They don’t like the deal as it is currently written, but it was unclear what they want changed.
We have a modest suggestion: Dump the 45-cent a gallon tax subsidy for ethanol and the 54-cent tariff on ethanol imports that cost taxpayers $6 billion a year and provide no discernible benefit.
The subsidy and tariff, like the Bush tax cuts, were set to expire at the end of the year, but, according to several Democrats, are part of the tax deal.
A week ago a bipartisan group of 17 U.S. senators signed a letter calling for an end to the ethanol giveaway under the Renewable Fuels Reinvestment Act.
In the letter to Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell, the senators said, “The data overwhelmingly demonstrate that the costs of the current ethanol subsidy and tariff far outweigh the benefits. According to a July 2010 study by the Congressional Budget Office, ethanol tax credits cost taxpayers $1.78 for each gallon of gasoline consumption reduced, and $750 for each metric ton of carbon dioxide equivalent emissions reduced. The Center for Agricultural and Rural Development at Iowa State University recently estimated that a one-year extension of the ethanol subsidy and tariff would lead to only 427 additional direct domestic jobs at a cost of almost $6 billion.”
On top of that, the price of corn, the chief source of ethanol, is at an all-time high, contributing to food cost inflation.
As for reducing pollution, researchers say the standard blend of 10 percent ethanol and 90 percent gasoline increases emissions of total hydrocarbons and some toxins.
Even Al Gore, the guru of green energy and preacher of climate change, recently admitted his vote for corn-based ethanol was “a mistake.” He blames politics. “One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for president.”
No rational reason can be found for continuation of this ethanol support scheme. It is time the farmers of Tennessee started growing corn for useful purposes — like bourbon.