The Washington Cornhuskers

The Washington Cornhuskers

Subsidies: A bipartisan group of 73 Senators votes to end both the ethanol tax credit and the tariff on imported ethanol. Maybe we can finally cut the federal deficit and stop putting food in our gas tanks.

Apparently staring at the bottom of an economic abyss concentrates the mind wonderfully, as a, dare we say it, bipartisan group of 38 Democrats, 33 Republicans and both independents in the U.S. Senate voted to end the government boondoggle that subsidizes a wasteful but politically vested form of energy.

We have noted that since Iowa is the first presidential contest it activates the pandering gene in most ambitious politicians and suggested that if the first caucus state were Idaho we would probably be trying to stuff potatoes in our gas tanks.

Even Al Gore has admitted exploiting ethanol in his global warming crusade for political reasons.

The 73-27 vote on an amendment by Sen. Diane Feinstein, D-Calif., exceeded the 60-vote threshold needed to advance the measure as part of an economic development bill. While the bill itself is unlikely to go anywhere, the vote, after an earlier disappointing vote on a procedural matter, signals that when the ethanol subsidy expires on Dec. 31 it is not likely to be renewed.

The amendment not only would repeal the Volumetric Ethanol Excise Tax Credit that subsidizes ethanol producers, a favored industry unlike Big Oil, but also a 54-cent a gallon tariff on foreign ethanol from the likes of Brazil.

According to the administration, oil from Brazil is good, but ethanol is not. Domestically produced ethanol is good but domestically produced oil is bad. Huh?

We would have wished to see more Republicans, indeed all, united against this poster child for government waste, another intervention in the free market in an attempt to pick winners and losers. Farm state senators and those with political ambitions sat this one out.

And the amendment does nothing to end the actual federal mandate specifying U.S. consumption of 36 billion gallons in "renewable fuels" each year until 2022. Without this mandate, the tariff and the tax credit, ethanol could not compete in the marketplace.

We agree with the former governor of energy-rich but off limits Alaska that we should end all energy subsidies, from oil to ethanol, and let the free market pick winners and losers.

Sarah Palin — in stark contrast to former Massachusetts Gov. Mitt Romney, who likes the Iowa-grown gas additive — takes particular aim at ethanol subsidies, which cost taxpayers about $5 billion last year.

Using agricultural crops for bio-fuels such as ethanol increases demand and raises prices. We've already seen "tortilla riots" in Mexico. And just go to the supermarket and check prices and you'll see the results of using 40% of the U.S. corn crop for ethanol production.

As Patrick Richardson reports in Pajamas Media, coming off the third largest corn harvest in U.S. history in 2010, the carryover (unsold corn still in elevators) constitutes only a two week supply, the lowest level since the Dust Bowl of the 1930s. At this rate, we may soon be importing foreign corn as well as foreign oil.

According to a report prepared by 10 international organizations, including the World Bank and five different arms of the U.N., such as the Food and Agriculture Organization and the International Fund for Agricultural Development — we're not talking right-wingers here — increased bio-fuel mandates by governments could raise the price of coarse grains as much as 13%, oilseeds by 7% and vegetable oil 35% on average each year between 2013 and 2017.

Ethanol has never made much sense economically or environmentally. It never would have made it to market without politically motivated congressional mandates and huge subsidies.

Believers in free markets and less government need to join the effort to shuck corn as an energy source. Corn belongs in our breakfast cereal and on our dinner plates, not in our gas tanks.