Yeah for sure. It will be interesting to see if Perry will take this further. I don't know if the head of the EPA is an appointed position or not. But, if it is appointed, then Bush should jerk this guy out and replace him asap.
I remember back during the oil embargo of the 70’s when Congress passed the 55 mph law, some states attempted to buck it and the informed by our federal government that if they did not comply with the 55 mph law their federal funds would be held up until they did. It's my guess that's the leverage the feds would use against Perry if he should attempt to go against the ethanol regulation as well...
It would be interesting if a state had the leverage to block federal tax withholdings from being deducted from their constituent's paychecks. "Cut us off and we cut you off".
Perhaps we need Washington to pass a simple law that, outside of military spending, all taxes collected in a jurisdiction must be spent in that same jurisdiction.