Buying votes with your money and health

Ethanol Kickback: Corn-Fed Hypocrisy

Subsidies: As with the Cornhusker Kickback and the Louisiana Purchase, the majority leader of the Senate seeks to buy votes for a bill, this time the tax-cut compromise with support for ethanol credits for the rich.

With the tax-cut compromise having made it through the Senate, the Democrats have once again reminded us why the voters threw a good portion of the rascals out in 2010. They continue to act as if the populist revolt against tax-and-spend big government never happened.

To sweeten the deal made between President Obama and Republicans regarding extending all the decade-old Bush tax rates, including those derided by liberals as "tax cuts for the wealthy," Majority Leader Harry Reid added corn sweetener in the form of extending the 45-cents-per-gallon ethanol tax credit.

Call this a tax credit for the wealthy. It's also the poster child for tax-spend-and-elect big government. Illinois-based Archer Daniels Midland, the nation's second-largest ethanol producer, has operations in 119 congressional districts for good reason. Helping keep this boondoggle going is the fact that Iowa has the first presidential caucus.

Ethanol is also protected by a 54-cents-per-gallon tariff on ethanol imported from countries like Brazil that can make it from sugar cheaper. The tariff will also be extended. Brazilians can't vote in our elections; Iowans and residents of other corn states can.

Sen. Tom Harkin, D-Iowa, who has railed against tax cuts for the wealthy and was no fan of the compromise, wanted domestic ethanol to continue to be protected and subsidized. Reid hopes to win the vote of another compromise opponent, Sen. Sherrod Brown, D-Ohio, through the inclusion of an extension of the Section 1603 cash grant program for the renewable energy industry.

These senators don't want taxes raised on the middle class, but are OK with food prices being raised through the increasing diversion of corn to ethanol production and the spending of billions we don't have on alternative energy sources that seemingly prove only our need to be independent of ... alternative energy sources.

"Producing ethanol for use in motor fuels increases the demand for corn, which ultimately raises the prices that consumers pay for a wide variety of foods at the grocery store, ranging from corn-syrup sweeteners in soft drinks to meat, dairy and poultry products," says the Congressional Budget Office.

Reid rejected a proposal by Sen. Max Baucus, D-Mont., that would have continued the subsidy at a reduced 36 cents a gallon of ethanol. That proposal came at the urging of a bipartisan group of 17 senators led by Sen. Dianne Feinstein, D-Calif., and Sen. Jon Kyl, R-Ariz., who wrote a letter saying that ethanol subsidies are "fiscally irresponsible and environmentally unwise."

Extending the ethanol subsidies for 2011 will cost $6 billion. That may not seem like a lot, but the amount is magnified by the negative impact on food prices and the environment. Using the math provided by Iowa State University's Center for Agricultural and Rural Development, we would, in typical stimulus fashion, be "saving or creating" a mere 420 jobs at an average cost of about $14 million a job.

According to the Hoover Institution's Henry Miller and professor Colin Carter of the University of California, Davis, "ethanol yields about 30% less energy per gallon of gasoline, so miles per gallon in internal combustion engines drop significantly."

Automakers have warned that increasing the percentage of ethanol in gasoline would damage current engines.

It takes about 1,700 gallons of water to produce one gallon of ethanol. Each acre of corn requires 130 pounds of nitrogen and 55 pounds of phosphorous. Increased acreage means increased agricultural runoff that is creating aquatic dead zones in our rivers, bays and coastal areas.

Perhaps we can forgive the Tea Party's cynicism that all the November election may have accomplished is to rearrange the deck chairs in the dead zone known as Congress.