Coburn, Conservative Group Feud Over Ethanol Subsidies

WASHINGTON -- Sen. Tom Coburn, one of three Republican members of a bipartisan group aiming to shrink the deficit, took aim on Tuesday at the conservative group Americans for Tax Reform, arguing their defense of ethanol subsidies amounted to support for "wasteful spending and a de facto tax increase on every American."

A spokesman for Americans for Tax Reform had criticized Coburn Monday, along with fellow Gang of Six Republican Sens. Saxby Chambliss (Ga.) and Mike Crapo (Idaho), over their effort to end ethanol subsidies as part of a broader deficit reduction plan. The six-member group of senators has discussed budget cuts and tax reforms -- including putting an end to loopholes and certain subsidies -- to tackle the nation's debt.

The spokesman for the organization, which is led by conservative lobbyist Grover Norquist, said it supports an end to ethanol subsidies. But it opposes increasing the government's tax revenue without adding equal or greater tax reductions elsewhere -- effectively ruling out tax reform as a means for paying down the $1.6 trillion deficit.

Republican leadership in both chambers seems to agree: Both Senate Minority Leader Mitch McConnell (R-Ky.) and House Speaker John Boehner (R-Ohio) have said they will not allow tax increases as part of a deal to decrease the debt.

Coburn struck back in a letter on Tuesday, arguing Norquist and Americans for Tax Reform were being disingenuous by equating an end to ethanol subsidies as violation of conservative values.

"Ethanol subsidies are a spending program wrongly placed in the tax code that increases the burden of government, keeps tax rates artificially high, and forces consumers to pay more for food and energy," the letter reads. "Rather than demanding that Senate conservatives violate their consciences and support distortions in the tax code that increase spending and maintain Washington's power over taxpayer's lives, your organization should assist our efforts."

Coburn has argued ethanol subsidies, which give about $6 billion to ethanol producers, are unnecessary and an inefficient means of expanding energy production. He has also said the subsidies drive up food prices.

A number of outside experts agree with those assertions, including special interest groups in food production, energy, environment and hunger issues. The Government Accountability Office wrote earlier this month that the subsidies are unnecessary to guarantee domestic ethanol production.

The subsidies are set to expire at the end of the year, but Coburn hopes to put an end to them sooner. He and Sen. Ben Cardin (D-Md.) introduced a bill earlier this month that would remove tax incentives for ethanol.

Ryan Ellis, tax policy director at Americans for Tax Reform, responded to Coburn Tuesday, reiterating that the organization supports ending ethanol subsidies if it is possible to do so in a tax-neutral way -- but not if ending them increases the government's overall tax revenue.

"The best policy outcome is to eliminate the ethanol tax credit in a way that leaves money in the hands of taxpayers, not increases the amount of money going to Washington for the Appropriations Committees to spend," he wrote in a letter on Tuesday afternoon. "Your amendment as written to repeal the ethanol credit (unfortunately) does the latter."

This is the second spat between Americans for Tax Reform and the Republican members of the "Gang of Six," after a similarly icy letter exchange in February.

Coburn said on Tuesday he would continue to push for an end to ethanol subsidies despite criticism, including from those who argue it is not the right time to tackle the issue.

"We need to do it any time we can," Coburn told reporters. "We're not going to get out of $1.6 trillion unless we do it $2 billion, $3 billion, $6 billion at a time."

Sen. John McCain (R-Ariz.), who also opposes ethanol subsidies, said on Tuesday he agreed the time was right to end the tax incentives.

"Oh right, 'it's not the right time to suggest saving billions of taxpayer dollars,' " he told reporters, mocking the criticism. "You can't be too serious about cutting waste and spending if you don't eliminate ethanol subsidies."

Additional reporting by Zach Carter.

Comments

[John Kettler]

04:49 PM on 04/15/2011

Okay, so this is what this article (and essentially what the debate between Coburn and Americans for Tax Reform) boils down to:

*Coburn: No ethanol filler in gas/no subsidies ---> equally priced gas and product, with the ethanol filler replaced with a comparable cost in tax increases ---> More tax inflow, and less debt.

*ATF: Less ethanol filler in gas ---> better gas ---> less expensive gas ---> less foreign expenditures for gas/motivated by it ---> less money flowing out of the country ---> more money that stays in this country to be spent in the economy, which means...More tax inflow, and less debt.

This is simplified, and I'm obviously leaving some big things out of the discussion, but in principle, they agree! I prefer ATF's result, but you know what I like? An end to ethanol subsidies. Period!

It would be the greatest disservice to conservatives and liberals alike if we don't do what's necessary to eliminate ethanol subsidies _now_. Be it Coburn or ATF who wins out, either would be better than the status quo.

[lbsaltzman]

07:29 AM on 04/03/2011

Ethanol subsidies should be eliminated immediately. This is one of the few times I agree with a Republican. Studies show that the energy required to make ethanol make it a net energy loss. In other words it takes more energy to make ethanol than you gain in the energy created. Ethanol is also taking important crop land out of production for food and raising food prices everywhere.

[texfly]

03:10 PM on 04/03/2011

I second your point. I am a liberal, progressive scientist who has known for years that fuel from ethanol is a waste.

[chessgms2]

02:09 PM on 05/28/2011

Agree too, as another Liberal. Pork barrel politics for grain producing states and Big Agribusiness, a net energy loss to produce, increases already off the hook food prices....as well as the idea that in an increasingly hungry America with millions on food stamps, we're BURNING UP FOOD TO DRIVE OUR SUV'S TO THE MALL. Does it GET any more idiotic?

[HazelPethigFan]

08:16 PM on 03/30/2011

The anti-ethanol alliance of big oil and liberals is very very weird.

It is discouraging that the Dems have turned to the right when it comes to oil and ethanol.

Hello Dems? Sen Coburn has always been against ethanol. It's nothing new. He represents big oil and is from an oil state. Big oil has always misled the U.S. about ethanol and now the Dems are their parrots.

Liberals need to start reading unbiased data and not the bogus research from the American Petroleum Institute: Oh? yes... corn ethanol uses less fossil fuel energy to produce than gasoline.

Here's data from the Dept of Energy. It's as neutral as you can find because the DOE doesn't sell any oil or promote any anti-modern agriculture agenda like the left wingers do.
http://www1.eere.energy.gov/biomass/ethanol_myths_facts.html

[MovieGuy2010]

04:35 PM on 03/31/2011

Just because Coburn is from an oil state doesn't make his argument invalid on the face of it?

What kind of state are you from? I'm betting a state that produces a lot of corn.

Interesting look at your history.

You seem mostly to be here to lobby FOR GMO, Monsanto and for Corn Subsidies.

Any chance you have a stake in any or all of those?

I haven's seen you answer, so i wll ask directly?

Are you in favor of continuing subsidising the Ethanol and the Corn industry?

If so, why?

Are they NOT already and have been profitable for some time?

Even IF Ethanol is this boon to alternative energy, why do we all have to subsidize industry giants like Archers-Daniels-Midlands, who are already very profitable, with tax payer money?

[rock0267]

11:20 AM on 04/01/2011

misled? So do you deny that using ethenol RAISES the cost of food? Never mind the fact that increased use of ethenol RUINS car engines.

[ZeraLee]

06:18 PM on 03/30/2011

Adding ethanol to gasoline is a way of getting more from the oil we import, but ethanol was never going to be a replacement. We have had ethanol in MN for more than 20 years, and even though it is now mandatory, we are still subsidizing it. At first, it was to get ethanol started - which helped the corn farmers by expanding their markets. Now, it is about keeping the price of gas down - except that we increased the tax on gas to help fund specific policies.

But on a national scale, it has been a bigger problem - inflating demand and driving up the cost of food. Several companies have taken the risk to invest in ethanol production, and throwing them under the bus would kill jobs and chill future investment in alternative fuels.

Throttling back on ethanol could give a boost to the economy in lower food prices, and I favor that, but we must still be mindful of the pending energy crisis. In an economy dependent on cheap energy, we cannot continue to ignore the warning signs.

You cut off your nose to spite your face, and you will never know when your stit shinks.

[Organic-Guy]

12:25 PM on 03/30/2011

I'm all for alternative fuels, closing down our aging reactors as they come to the end of their life span, investing in more wind energy etc, but I have to agree. Taking land out of production for food and subsidizing an industry that consumes almost as much energy as it produces and wastes huge volumes of water is just wrong. There has to be a better way. conservation and stricter fuel economy standards for our vehicles can save us more energy and the costs that go with it than Ethanol can right now. Maybe there's a way to get more out of this technology for less down the road but right now it's a bottomless pit for tax payers and the environment.

[HazelPethigFan]

08:23 PM on 03/30/2011

So...it's drill baby drill eh?

Gas uses more fossil fuel to produce than corn ethanol.
Data from DOE:
http://www1.eere.energy.gov/biomass/ethanol_myths_facts.html

And by the way, Organic food uses more land to produce the same yield than modern agriculture. So let's not lecture us about proper use of land for food.

[rock0267]

11:23 AM on 04/01/2011

increasted fuel standards are great...UNTIL people realize that what comes with that are cars the size of closets. How are we supposed to carry our families around in that (especially on trips to the beach, etc).
Oh, I forgot. Libs don't want us to have children and forget about driving anywhere for pleasure.

[swjacobs]

10:19 AM on 03/30/2011

Ethanol is the lie that can't die. It's been a boondoggle for decades. I grew up in a midwestern state where everyone with a pulse knows that ADM has been making a killing off of this for years. Higher fuel prices + lower fuel economy compared to straight gasoline + taxpayer subsidies + poor use of land and water resources = $ in ADM's pockets (and the legislators who shill for ADM). There are no positives for the public with this technology in its current model / use, it needs to be killed.

[houston we have aproblem]

09:56 AM on 03/30/2011

now we are focusing on the right cuts

cut ethanol, not education

[texfly]

03:06 PM on 04/03/2011

I'm from Texas. We don't have corn; we just cut education. Trying hard to catch up with Mississippi.

[seawillow]

09:48 AM on 03/30/2011

Even Al Gore admits the ethanol boondoggle.

[R U Sirius]

09:42 AM on 03/30/2011

If there's anything this senator from Oklahoma knows about, it's CORN.

[jerabaub]

09:40 AM on 03/30/2011

Don't ordinarily agree with Coburn, but I do on this one.

On the larger issue of deficits and debt, I would respect extreme conservatives if they advocated a serious...not cosmetic...but a serious reduction in Defense as a means to put our financial health in better shape.

If so called entitlements can be cut, or limited in growth, then the least we can do is demand the same for Defense, which is, after all is said and done, nothing more than discretionary spending(aside from financial commitments we have made to veterans).

If Americans who just barely make ends meet already must contend now with cuts in social security, medicare, foodstamps, and other programs designed to keep them from abject poverty, and when republicans in congress advocate cutting the budgets for agencies warning our nation of tsunamis, and advocate cutting the budgets for cancer research(incredible!!), then by god the defense budget can be axed.

It ain't no sacred cow.

And in Nov. 2012, we'll defeat those in congress who cut funding for cancer research and for warning systems on tsunamis.

How stupid can one congress be?

And if Americans don't vote them out in 2012, the question will be: "Just how stupid is the American electorate"?

[rock0267]

11:26 AM on 04/01/2011

The American electorate are pretty stupid...they elected Obama, didn't they?

[BigRex]

12:27 PM on 04/06/2011

it beat electing Grumpy McCain and the Alaskan Idiot...so I would say the majority was actually smarter than you give them credit.

[jokerdanny]

09:31 AM on 03/30/2011

geesh, even al gore admits corn-based fuels is a mistake

[kbeth]

09:29 AM on 03/30/2011

I do wonder where good-ole-boy Saxby(Ga) would stand if the issue was farm subsidies?

[Soulsurfer]

09:23 AM on 03/30/2011

Interesting post. Coburn is actually right on this one, but shows the hypocrisy of the repub leadership. Ethanol is just a sop to the Midwest corn growers. Ecologically and economically it's a disaster.

[philss]

09:22 AM on 03/30/2011

lol@gang of six
the re thugicants are just there to push the re thugicant agenda
they are not there to encourage or participate in any sort of compromise
this is jkust a shame and these foolish democrats who are participating are just tools