What is there to say? This is disappointing but not really surprising:
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.
[. . .]
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.
It was supposed to help the environment. But various studies have found that it does little, if anything, to reduce smog or greenhouse gas emissions.
It was supposed to keep gasoline prices down. Anyone filling up these days can see how well that's worked out.
What it has done is raise food prices.
"Ending this madness should be a no-brainer." Indeed, especially for a GOP that has spent so much time apparently heeding the tea party call to tame the federal government.
Sad to say, both Sens. Lugar and Coats voted against the measure, helping defeat it. If the two of them ever dare to rail against "special interests" again, we should ask them about the corn lobby. We expect those in a business to stick up for their business. But we expect our legislators to look beyond narrow interests to the common good.
Coats said it would be wrong to end the subsidy now because in December "Congress made a commitment to extend" the credits through the end of the year and Hoosiers made investments based on that. That sounds a lot like "we have to keep doing it because we've been doing it." Good luck on getting anything killed based on that philosophy. It also sounds like Coats isn't against ending the subsidy, just the timing of it. But an alternative proposal supported by 15 farm state senators, including Lugar and Coats, would have cut off the subsidy on July 1 but replace it with "a variable subsidy that fluctuates with the price of oil."
"We must end Washington's insane spending" is a great talking game, but when push comes to shove, reasons can always be found to keep the goodies flowing to your own constituents.
Comments
I can understand why corn farmers think ethanol fuel is a swell idea.
But how can anyone else think that making car fuel out of our food is well-advised? It works in Brazil, where sugar cane is cheap and abundant. So naturally, we ban the importation of ethanol from Brazil.
The stuff isn't even financially useful, it actually reduces your car's mileage by about 10%.
Let's do more useful things with corn, like make whiskey. At least we can sit around and bemoan the price of filling our cars' tanks while easing the pain with a little Jack Daniels.
Little Place.....: If Brazil ethanol is "banned from importation" how can the Indy Cars burn only Brazilian Ethanol?? I believe the price of Brazilian consumer ethanol (as contrasted to racing fuel), after the import duties are applied, is what makes it very hard to sell in the US.
Brazilian ethanol is subject to both a 2.5% ad valorem import duty, and a 54c/gallon excise tax.
The Ethanol Import Act of 1980 established the 54c tax to offset the Blender's Tax Credit of 51c/gallon for ethanol blended in fuel mixtures. That 54c tax means that domestic ethanol is cheaper than Brazilian.
Ethanol from the Carribean (mostly from Costa Rica and El Salvador) is exempt from the 54c excise tax. The idea was to promote political and economic stability within our CAFTA trading partners.
The Renewable Fuel Standard set a goal of 9 billion gallons in 2008, rising to 36 billion in 2022, of renewable fuels to be used in motor vehicle fuels. An increasing amount (21 billion of the 36 billion in 2022) needs to be "advanced biofuels", which means something OTHER than ethanol derived from corn.
So taxes, not a ban, keep Brazilian ethanol out of our gas tanks for now. In the future, that may change. But giving our cars food to eat, rather than waste fuel, is a dumb idea.
The wine and sugar industries have a vested interest here, not just the corn industry. In Europe, industrial ethanol is blended with wine to produce a cheaper product, making the wine producers unhappy.
Heavy import duties on sugar, but not on candy, mean that Spangler makes most of their candy canes in Mexico, rather than in Bryan. We're exporting candy-making jobs, without really protecting the US sugar industry.
A flat and uniform VAT to replace corporate and personal income taxes and excise taxes would go a LONG way to fix the US economy. If we paid cash when we subsidized something, rather than monkeying with the tax code, it would improve transparency - and we'd probably do less of it.
Harl - Thanks for the info - It sure shows the "why's" & "why not's"! I tend to agree with you (surprise!) on a uniform tax of some sort to get rid of the bloated IRS and level the playing field!