Ethanol subsidies fuel deficit
A pump handle in Iowa shows a blend of 85 percent grain alcohol distilled from corn and 15 percent gasoline. Credit: AP, 2006
With federal deficits and food prices going up, the U.S. Senate should have seized the opportunity Tuesday to end an ethanol tax break contributing to both. It didn't, and that fecklessness is a sad example of Washington's failure to confront the nation's problems.
On the table was a 45-cent-a-gallon tax credit given to U.S. ethanol producers since 2005, at a current cost to the treasury of $6 billion a year. It was justified in 2005 as a way to encourage investments in that corn-based biofuel. But those investments have now been made. So ending the subsidy should have been an easy call for lawmakers searching for trillions of dollars in savings.
If reining in government borrowing isn't reason enough to end the give-away, how about giving consumers a break? The growing use of ethanol as fuel has inflated the price of corn, which has driven up the price of foods such as meat.
Sen. Tom Coburn, (R-Okla.) who branded the subsidy "wasteful," tried to end government support. But Democrats, who are in the majority, teamed up with Republicans representing farm states to defeat his measure. The Democrats defended their vote by claiming procedural niceties weren't followed. They promised to revisit the issue soon. It would be easier to trust those assurances if the Senate hadn't failed last month to end a $2.1-billion-a-year tax break for big oil companies.
Congress has to find the courage to end wasteful special interest tax breaks. We can't afford them.
