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Jigar Shah

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Governor Rick Perry Please Lobby the Super Committee to End Permanent Energy Subsidies

Posted: 10/29/11 03:13 PM ET

In August, environmentalists Friends of the Earth and Public Citizen partnered with climate deniers at the Heritage Foundation to produce the non-partisan Green Scissors report which outlines wasteful government subsidies totaling $380 billion over the next five years.

Separately, in August, the twelve members of the Congressional "super committee" were announced. The super committee is charged with finding at least $1.2 trillion in deficit reduction measures over 10 years.

The super committee deadline: November 23rd.

Cutting $380 billion in permanent subsidies immediately for mature industries like coal, natural gas, oil, and ethanol -- immediately gets the super committee to 25 percent of its goal.

This past June, the Senate sent a strong signal to end the main corn ethanol tax credit, known as the VEETC, and the ethanol import tariff.

Subsidies are necessary in the incubation phase, but oil is a "mature" industry; and ethanol and solar are "proven and established" industries. As industries prove and establish themselves, and then mature, subsidies should be retired. So, now it is time to end permanent federal subsidies for oil drilling and phased out for solar and wind technologies.

Luckily Governor Rick Perry, and Congressman Ron Paul have stepped up to put the end of subsidies in the national conversation. Perry announced his energy plan on October 14, entitled: "Energizing American Jobs and Security." It called for an end to subsidies.

Perry's energy plan website states: "As part of a broader tax reform strategy, I will also ask Congress to eliminate direct subsidies and tax credits that distort the energy marketplace. My plan levels the playing field."

And, according to Ron Paul, "We should start by ending subsidies for oil companies. And we should never, ever go to war to protect our perceived oil interests. If oil were allowed to rise to its natural price, there would be tremendous market incentives to find alternate sources of energy. At the same time, I can't support government 'investment' in alternative sources either, for this is not investment at all."

And Mitt Romney agreed in the October 18 Republican debate that subsidies should be pulled back.

Newt Gingrich piled on in Iowa on October 24 saying, "I don't want to pick a fight with any of my good friends who are running, but I get a little weary of people who represent oil, which has consistently had tax subsidies for its entire history, explaining that they're really not sure about these subsidies. Notice it's always these subsidies. It's never the ones down there. I notice that when Senator [Tom] Coburn [R-OK] introduced a bill that was anti-ethanol, he didn't include subsidies for gas and oil, because as an Oklahoman, that would be suicidal. So I just think we ought to have a fair playing field."

Now, getting back to the Super Committee, I have taken a random sampling of votes over recent years of each committee member to see if each supports subsidies.

My scorecard revealed a random sampling of 34 votes, with 19 for subsidies. It means that much of the time, some interest group is pushing our government officials to underwrite an energy cost whether it is a fossil fuel, or renewable energy source.

But, the other point is that our legislators are spending thousands of hours debating whether to spend money to give an unfair advantage to one energy source over another. And the fight seems to be over renewable fuels versus fossil fuels.

Shouldn't scientists figure out which fuels are safest and then turn them over to the free marketplace to determine which ones are liked by consumers?

Now that Governor Perry has insisted on the end of energy subsidies, can he take the lead over the next few weeks to get the Super Committee to immediately extract $380 billion in wasteful permanent subsidies out of the budget? I hope so - and I am with him on that.

This is no longer a left wing, right wing argument. We don't need votes on issues that are on one side of the aisle or the other. We need votes like we had on ethanol subsidies in June. We want to ask -- "is this how we want to spend our tax dollars?"

The example is in fact, the Green Scissors report. It had groups that are polar opposites like Friends of The Earth, and the Heritage Foundation to come together to agree on the end of permanent subsidies.

Their interest is not in protecting interest groups -- rather it is protecting America's budget and environmental future. If you are a Tea Party fan, you should love the level playing field and reduced budget deficit. If you are an OccupyWallStreet person then you should be happy that the permanent subsidies set up for the 1 percent are going away so that the 99 percent can participate.

Plus, as Governor Perry and Newt Gingrich have said, we need to level the playing field. The right technologies and solutions to fuel our electricity and transportation needs will win a free market society.

So, it is my hope that Governor Perry, Governor Romney, Ron Paul and others who are pushing the debate to "end permanent subsidies" push it to the super committee now. It is $380 billion that can be put to better use.