Even Iowans don't care about ethanol subsidies anymore

Rush Limbaugh said Pawlenty was “politically gutsy” for his stance on the corn-based fuel. He stood before the voters of the corn-growing state and told them something they didn’t want to hear. But how brave was it? It is the mainstream Republican position in Iowa that ethanol subsidies must be phased out. Chuck Grassley, the state’s senior senator, has authored legislation that calls for a gradual decrease in the subsidy. The state’s Republican governor and the state’s agriculture commissioner support the reduction. Even the Iowa Renewable Fuels Association—also known as the ethanol lobby—supports this position. “It used to be if you were for ethanol you were for the VEETC,” said Monte Shaw of IRFA, using the shorthand for the main ethanol subsidy. “Today you can be for ethanol and want to see VEETC go away.”

Candidate Obama regularly claimed he would tell hard truths on the campaign trail but he never much did it. Pawlenty may be following the same model. But he does win some points for bravery, however. “The truth about federal energy subsidies, including federal subsidies for ethanol, is that they have to be phased out,” he said. So Pawlenty wasn’t just aiming at the $6 billion-a-year ethanol subsidy but all energy subsidies, including those for oil and solar and wind. Depending on what you define as a subsidy that could total anywhere from $17 billion, the conservative government estimate, to $50 billion, the estimate made by Doug Koplow, a specialist in energy subsides at Earthtrack in Cambridge, Mass…

The bravest position would be to allow the tax credit simply to expire on schedule. That’s the position of Rep. Ron Paul. That’s Sen. Tom Coburn’s position. It’s not Pawlenty’s position. He said the phase-out “can’t be done overnight because companies have invested a lot.” His call for a gradual phase-out is in keeping with the spirit of what Grassley and the state’s leadership have proposed.