Heartland Institute Reacts to Failed U.S. Senate Vote to Kill Ethanol Subsidy

June 14, 2011

 

On Tuesday, June 14, the Senate will vote on an amendment to the Economic Development Reauthorization Act (S. 782) sponsored by Senators Tom Coburn (R-OK) and Dianne Feinstein (D-CA) that will end the ethanol blenders’ tax credit and corresponding import tariff. Senator Jim DeMint’s (R-SC) related proposal to eliminate the ethanol mandate alongside the death tax will also be up for a vote.

The following statements by energy policy experts at The Heartland Institute may be used for attribution. For more comments, refer to the contact information below:


“Ethanol subsidies make no sense economically or environmentally.

“Economically, ethanol is more expensive than gasoline and delivers fewer miles per gallon. Devoting our corn crop to ethanol also drives up food prices. Environmentally, ethanol production is a tremendous drain on precious water resources. Ethanol subsidies and mandates also encourage the development of marginal crop-lands that otherwise would be left in a more natural state.

“With ethanol subsidies and mandates, everybody loses except the numerically small but politically powerful special interests who can game the system for their own benefit.”

James M. Taylor
Senior Fellow for Environmental Policy
The Heartland Institute
jtaylor@heartland.org
941/776-5690


“It is time for Congress to act decisively to phase out and eliminate these corporate welfare programs that distort energy markets and pass higher prices onto consumers. While politicians are quick to say they are not in the business of choosing winners and losers, for years they have done just that by burying these types of credits in the tax code.

“Some members of Congress, as Sen. Tom Harkin (D-IA) already has expressed, will hide their vote against cloture behind procedural statements. But make no mistake: Their intention is to maintain an unsustainable status quo. By eliminating the mandate, the subsidy, and the tariff, the Senate would signal that the market is best positioned to set prices and priorities in the energy industry.”

John Monaghan
Legislative Specialist for Environmental Policy 
The Heartland Institute 
jmonaghan@heartland.org
312/377-4000

(Read John Monaghan’s blog post on this vote at Somewhat Reasonable.)


“There is an old legal theory, rooted in English common law, under which a public official can be sued for ‘malfeasance’ in office for acts that are harmful but fall short of criminal conduct. This theory is the equivalent of medical malpractice and has been applied to a public officeholder who acts with ‘ignorance’ or ‘inattention,’ thereby abusing his official powers, as one U.S. court put it, and harming the public.

“This theory has not been used very often in recent years – until it was revived in 2009, when it was successfully used to remove Rod Blagojevich as governor of the state of Illinois, prior to his trials on criminal charges.

“It is well known that, among other things, ethanol diverts crops from food supplies, thus increasing food prices; consumes vast amounts of increasingly scarce groundwater; damages engines, especially older ones; and costs taxpayers billions of dollars in corporate welfare for ethanol subsidies at a time when they can ill afford it.

“If a vote to continue ethanol subsidies is not malfeasance in office, I don’t know what is.”

Maureen Martin
Senior Fellow for Legal Affairs 
The Heartland Institute 
mmartin@heartland.org
920/ 295-6032


“Billions of dollars are taken from U.S. taxpayers and consumers around the world to support the ethanol boondoggle. That money ends up in the bank accounts of powerful interest groups ranging from the farm lobby to corporations that count on ethanol money. Those lobbies and corporations then funnel some of the ethanol money Congress hands them back to Congress.

“The ethanol scam is one of the clearest examples we have of the corrupt and incestuous relationship between big business and big government.”

Steve Stanek
Research Fellow, Budget and Tax Policy 
The Heartland Institute 
Managing Editor 
Budget & Tax News
sstanek@heartland.org
815/385-5602