Republicans lawmakers have made a lot of noise about cutting government spending recently, so ending a $5 billion annual subsidy for an alternative fuel program that is pushing up food prices and puts more money into the hands of oil companies should have been an easy thing to eliminate. After several votes, the Senate got it right and voted to end the subsidy.
Earlier this month, the Senate finally voted to immediately end a 45-cent-per-gallon subsidy and an import tariff for the fuel made from corn. The vote is somewhat symbolic, since it is part of a larger bill that may not make it through the Republican-controlled House. However, a vote to end the subsidy now should at least mean the financial assistance isn’t automatically extended at the end of the year.
“This subsidy drives up the price of groceries for every family in Maine,” Sen. Olympia Snowe said after the vote. “Eliminating billions of dollars in subsidies that have done little to alleviate high gas prices is vital to working toward a balanced budget. As our nation’s debt tops $14 trillion, we simply cannot afford to sustain federal programs that provide little return on taxpayers’ investment.”
She and Sen. Susan Collins were on the right side of this issue for some time. Both voted for an earlier amendment to end the subsidies, which failed in the Senate because of concerns about procedure.
In addition to concerns about rising food prices, Sen. Collins noted that ethanol has caused engine problems. “Here in Maine, gasoline containing 10 percent ethanol is already causing problems in the engines of older cars, lawnmowers, snowmobiles and boats.”
Studies had also found that, although the fuel is cleaner burning than gasoline, ethanol takes large quantities of fossil fuels and water to produce.
Ethanol is politically tricky.
Anybody with a dream of becoming president must begin that journey in Iowa. Iowa grows a lot of corn. Corn is used to make ethanol. Then there are the powerful oil and gas interests. The subsidy money goes to oil companies, like ExxonMobil, Corp and BP, to blend ethanol into gasoline.
President Barack Obama was an ethanol supporter during his 2008 campaign, but has since tempered his enthusiasm.
Many Republicans — including White House aspirant Tim Pawlenty and former Alaska Gov. Sarah Palin — have been vocal in their opposition to government support for ethanol, saying it is a waste of federal resources. Anti-tax groups, including Grover Norquist’s Americans for Tax Reform, criticized the subsidy elimination as a tax increase.
Given the growing problems with ethanol, ending the subsidy is overdue. Next, lawmakers should reconsider mandates to increase the use of ethanol.