Senate rejects repeal of ethanol subsidies

For all the talk about eliminating energy tax breaks for oil companies, Senate Democrats (and several of their GOP counterparts) sure are protective of wasteful ethanol subsidies:

The Senate rejected an amendment Tuesday that would have put an abrupt stop to tax breaks and incentives for corn-based ethanol products popular with farm-state lawmakers.

Introduced by Sen. Tom Coburn, a cantankerous Oklahoman known as “Dr. No,” the amendment fell short, failing in a 40-to-59 procedural vote as members of both parties joined in opposition to the measure. Sixty votes were needed for passage.

Coburn, a conservative Republican, framed the elimination of ethanol subsidies as a responsible way to cut the nation’s deficit, and found himself allied with some unusual bedfellows: environmentalists.

“Eliminating the ethanol tax earmark and tariff would be a big step toward restoring fiscal sanity in Washington,” Coburn said in a statement. “Ethanol is bad economic policy, bad energy policy and bad environmental policy.”

You can see how your Senators voted here. In case you’re wondering, the Republicans voted against ending these subsides were Roy Blunt, Dan Coats, Chuck Grassley, John Hoeven, Mike Johanns, Mark Kirk, Dick Lugar, Jim Moran, Rob Portman, Pat Roberts, John Thune and Roger Wicker.

I don’t get it. The oil “subsidies” that President Barack Obama and Democrats so often deride aren’t even subsides, as Tim Carney notes:

I bet most people who follow politics believe big oil gets huge subsidies — in part, because that’s what Barack Obama says. Sure enough, oil is subsidized, and all oil subsidies should be ended, totally and immediately. But unlike, say, ethanol, nuclear, solar, wind, geothermal, electric cars, or any other form of “renewable” energy, oil doesn’t get direct gifts or even targeted tax breaks from the federal government.

Former Sen. John Sununu has a good op-ed today in the Boston Globe about oil subsidies. He points out that the biggest “oil subsidy” Obama talks about is really a “domestic production” tax credit, benefitting domestic oil drilling, coal mining, and chopping down trees as well as manufacturing. Congress created this subsidy after the WTO made us repeal an export subsidy in the tax code.

That’s not to say that theses tax credits shouldn’t be repealed, they should; but so should ethanol subsidies, which are subsidized at 45 cents per gallon. This blatant corporate welfare that even the United Nations agrees should be scrapped.

 


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