Press Release

March 14, 2011
Our view: What do one very liberal and one very conservative member of the U.S. Senate have in common? A distaste for a wasteful tax credit

There isn’t a long list of issues that unite Maryland‘s Benjamin L. Cardin with Oklahoma’s Tom Coburn, so when the progressive Democratic U.S. senator and his conservative Republican colleague find a measure on which they agree wholeheartedly, it means something. When the two political opposites actually co-sponsor a bill — and it involves saving taxpayers $4 billion this year while simultaneously improving the environment — the next step should be unanimous consent by Congress.

But don’t count on it. What the senators are proposing is an end to the lucrative tax credit that subsidizes the blending of corn-based ethanol into gasoline. It’s an outrageous waste of money, particularly at a time when Congress is focused on lowering the federal budget deficit. It’s also a boon to grain farmers and the large corporations that have invested in ethanol production.

Certainly, biofuels are not a bad idea when they mean less harm is done to the environment. But using expensive feed grains such as corn or soybeans to make alcohol leads to just as much environmental damage as burning oil, according to scientific studies. Yet taxpayers are shelling out $6 billion a year to the ethanol industry to ensure that almost every gallon of unleaded gasoline sold in this country is blended with alcohol.

Meanwhile, the increased demand for feed grains is raising grocery prices. Consumers are paying twice — once to subsidize the practice and again at the grocery store whenever they reach for a box of cereal or a pound of ground turkey. Ethanol now claims more than one-third of the domestic corn production.

How could anyone in Congress be focused on such minutiae as public broadcasting ($430 million proposed cut) or family planning grants ($317 million), both of which would cause the public harm, when they have a chance to save nearly 10 times as much as both of those controversial cuts combined, while also making it cheaper for families to put food on the table?

How shameful that Congress hasn’t rejected the subsidy before now. Just last month, former President Bill Clinton offered another reason to stop forcing grain-based alcohol on the public — rising feed prices are contributing to political instability in parts of the developing world.

The Cardin-Coburn bill has already attracted endorsements from advocates as varied as the co-sponsors, including the National Taxpayers Union, Friends of the Earth and the National Turkey Federation. It is probably not going to get a lot of kudos from Exxon or Archer Daniels Midland, companies that benefit from this particular example of corporate welfare.

Perhaps, someday, a biofuel industry that relies on products such as native switch grass, a nonpolluting crop that isn’t used as feed and doesn’t itself require a large investment in petroleum products, will develop in this country. But right now, what taxpayers are buying is 14 billion gallons of ethanol that comes mostly from corn, and that’s bad for the environment, for food prices and for the federal budget.

Given the clout of agribusiness lobbyists and Midwestern grain farmers, the ethanol subsidy will no doubt be difficult to dislodge. The Iowa caucuses are less than 11 months away. But politicians who stand up for this foolish federal subsidy should keep in mind that while they may make a few friends among farmers, they’ll also draw the wrath of everyone from tea party activists to tree-hugging liberals.

Oh, and add General Motors and other car manufacturers to the opposition, too. Ethanol fuel blends (gasohol) cause damage to engines that are not designed for its use. Corn-based ethanol may be homegrown, but that doesn’t make it worthy of such costly taxpayer (and food buyer and car owner) handouts.