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Ethanol & Budget Cuts: More Deeds, Less Words

The opinions expressed by columnists are their own and do not necessarily represent the views of

Republicans in Congress have taken giant steps forward to restore American economic vitality but, as the current tax legislation, up for a cloture vote in the Senate on Monday proves the GOP has yet to prove that they are serious about cutting spending. Nestled within the legislation that extends the Bush tax cuts for another two years is a 45 cents per gallon subsidy for ethanol, as well as a retroactive $1 per gallon credit for bio-diesel fuel. Continuing these subsidies costs taxpayers approximately $5 billion a year.

Budget-busting subsidies and bailouts of failing industries have been a mainstay of the Democrats in Congress over the last two years, but the tax legislation reveals that there are GOP senators who are not immune from the temptations of pork.

Folks familiar with Iowan Senator Charles Grassley are aware of his characterization as a deficit hawk, tough on waste, fraud and abuse, and yet, he’s the last hold-out on ethanol subsidies, an enormous source of government waste.

Even Al Gore has faced the inconvenient truth that ethanol “is not a good policy.” Corn-based ethanol is expensive and has dubious environmental benefits. Moreover, huge subsidies for corn-based ethanol drive up the cost of food as large amounts of U.S. farm production is diverted to make expensive fuel. Americans are then forced to buy a product that they do not want, because of government mandates for ethanol inclusion in gasoline blends. At the same time, protectionist measures prevent the importation of cheaper forms of ethanol made in Brazil, from sugar cane. These decisions, that enrich the Iowa corn industry, cost taxpayers dearly.

The good news is that the ethanol subsidy and the bio-diesel subsidy were due to expire at the end of this year. But, sadly, Grassley has placed parochial politics above the good of the GOP and the good of the country, and insisted that the extension be tagged on to the tax-cut legislation. So, there goes another 5 billion.

The fact that wasteful pork comes from a GOP Senator that bills himself as a budget hawk is disconcerting. Hopefully, GOP leaders, eager to show voters that they heard them this past November, will strip continued ethanol subsidies from the bill.

Why not let the Bush tax cuts stand alone? Why allow pork, such as the ethanol subsidy, to besmirch GOP efforts to restore fiscal sanity?

Democrats in Congress aren’t serious about cutting spending either, even though President Obama has talked about it a lot. Obama seems content with platitudes and disinterested in action. Americans, sadly, have grown used to politicians in Washington that speak eloquently about the necessity of cutting wasteful programs, boasting about their fiscal courage in making hard decisions. But, many of these politicians simply hope that Americans will ignore what they actually do.

When challenged on the Administration’s efforts to cut costs, Obama often cites the SAVE program as one of his centerpieces for finding and eliminating wasteful spending.

The idea, actually a good one, encourages federal employees to recommend ways to cut costs in the federal government. OMB set up a review committee and every federal employee was asked to come up with ideas to save taxpayer money or discover unneeded government programs. Thousands of ideas were submitted, and recently OMB released the list of “winning” ideas. Three, of four finalists, recommended posting various government forms online. The grand champion recommended limiting the mailing of the huge Federal Register to the 8,000 or so government employees that actually need it, instead of the 25,000 that now receive it.

In a government as spendthrift as ours, any recommendations to cut costs are important, but with over a trillion in federal spending annually, is eliminating a federal paper mailer really the best that the Obama Administration can do? Are we to believe that this is their single best idea, that it warrants a meeting with the President and possible inclusion in the President’s State of the Union speech?

My guess is that if the White House honestly tracked the full costs and time spent on administration of the SAVE program, we would learn that the program administration costs exceed the savings gained from such puny ideas.

Proof positive, in case you needed more, that Washington rhetoric on cutting waste, fraud and abuse rarely matches the actions taken. When Senators and the President can characterize themselves as cutters of waste in government spending, while championing some of the worst examples of wasteful subsidies, it tells Americans that our leaders are not yet ready to be held accountable and face our nation’s budgetary challenges with courage, integrity and honesty.

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