Posted on 06/04/2011 3:12:38 PM PDT by TaxPayer2000
Despite the libertarian, small-government rhetoric from conservative candidates and voters, Republican presidential hopefuls aren't ready to quit energy subsidies just yet.
It sure sounds like GOP contenders are talking tough: Tim Pawlenty has turned on his old buddy, ethanol, and Sarah Palin called this week for cutting all energy subsidies, setting a tea-party-like marker that others may feel pressured to emulate.
But in fact, the declared and potential presidential candidates are all over the map - and by no means fleeing en masse from their traditional support for subsidies.
Mitt Romney still supports ethanol subsidies. So do Newt Gingrich and Rick Santorum, sort of. And the Republicans still oppose President Barack Obama's idea of getting rid of subsidies for the oil industry.
The focus on the campaign trail thus far has been on continued federal help for corn-based ethanol - understandable as it remains an important commodity in Iowa, home to the first caucus and official test at the ballot box in the Republican primary.
"It becomes kind of a marker for a broader assessment of somebody's view of the type of role governments should play," said Michael Franc, vice president for government studies at the Heritage Foundation. "Every state has its version of ethanol."
Several of the Republican candidates have told crowds in the Hawkeye State that they want federal help for ethanol to continue - at least to a certain degree - although ex-Utah Gov. Jon Huntsman has said he won't compete in Iowa as he doesn't believe in "subsidies that prop up corn, soybeans and ethanol."
Former Massachusetts Gov. Romney - who finished a disappointing second to Arkansas Gov. Mike Huckabee in Iowa in 2008 - last week reiterated the support he showed for ethanol in that earlier campaign. "I support the subsidy of ethanol. I believe ethanol is an important part of our energy solution in this country," Romney said.
Pawlenty garnered much attention calling for a gradual scaling back of federal help for ethanol at the official kick off of his campaign for the White House last month.
"We need to phase out subsidies across all sources of energy and all industries, including ethanol," the former Minnesota governor said. "We simply can't afford them anymore." He added: "We need to do it gradually. We need to do it fairly. But we need to do it."
Some conservatives praised Pawlenty for boldly shifting from policies he implemented to help the ethanol industry as a farm-state governor.
But Pawlenty's new position isn't that radical a shift - it's lockstep with that of an industry that recognizes it needs to stay ahead of more aggressive attempts to repeal federal incentives. Ethanol backers are trying to piece together their own proposal to wean off of a 45-cent per-barrel blender tax credit for ethanol and move on to get federal help for setting up flex-fuel gas pumps and other infrastructure to increase market availability.
Former House Speaker Gingrich has said he supported ethanol subsidies as early as 1984 and says he would rather have money going to farmers and others in the United States that produce biofuels than to unstable regimes in the Middle East.
Gingrich - who earlier this year reportedly chided "big city" critics of ethanol - said a federal mandate allowing all cars to be flex-fueled vehicles could supplant the per-barrel blender tax credit.
Santorum, the former senator from Pennsylvania, wants to phase-down the blender tax credit over five years and then help provide infrastructure for flex- fueling stations.
Huntsman nebulously noted in a Wall Street Journal op-ed Wednesday about the "opportunity to reduce, reform and in some cases end government programs - including some popular but unaffordable subsidies for agriculture and energy - in order to save the trillions, not billions, necessary to make possible a future as bright as our past."
Huntsman's refusal to compete in Iowa, which he confirmed to ABC News, is reminiscent of 2008 GOP presidential nominee Sen. John McCain, who is a strong critic of ethanol subsides and essentially ignored the Iowa caucus in 2008. McCain finished fourth in the caucus that year.
GOP energy strategist Mike McKenna - a vocal opponent of energy subsidies - said some of the leading candidates are "kind of playing footsie with the issue."
But former Alaska Gov. Sarah Palin - who has not announced plans to make a White House run in 2012 - may have more closely laid out the tea party marker. Responding to a question about ethanol, she told reporters Tuesday that "all of our energy subsidies need to be relooked at today and eliminated."
There are doubts that Palin will actually mount a campaign. But her role as a potential kingmaker for the tea party movement may drive other Republican candidates further to the right.
That question affects a host of other historical and prospective energy sector beneficiaries, including nuclear power, natural gas vehicles and oil companies.
"Once you get beyond ethanol, there's definitely an issue about 'what do you talk about when you talk about a subsidy,'" said Steve Ellis, vice president at Taxpayers for Common Sense.
At the same time, it's early in the campaign, and the lack of detail from candidates isn't a surprise. "Nobody really expects them to have some sort of very narrow, specific energy plan other than 'drill, baby, drill' and eliminate subsidies," Ellis said.
President Barack Obama has gone after billions of dollars in annual tax incentives for oil companies - which Democrats say are subsidies to Big Oil and cutting them is a better way to reduce federal spending than going after Medicare and other programs.
Americans for Tax Reform President Grover Norquist said Democrats are unfairly targeting some oil industry incentives - like a section 199 domestic manufacturing tax deduction - that are available to others.
"It's one thing if you said it's a special tax deduction credit only for this industry because they lobbied well," Norquist recently told POLITICO.
Norquist's group is against credits for ethanol and natural gas vehicles, such as in a plan pushed by T. Boone Pickens that has earned some broad bipartisan backing in the House.
About a handful of initial GOP co-sponsors to the bill have dropped off the Pickens bill amid conservative ire that it is an expensive and targeted tax subsidy.
But one of the co-sponsors remains Rep. Ron Paul (R-Texas) - a representative of the libertarian wing of the Republican presidential contender crop.
Paul told POLITICO that doesn't believe in energy subsidies. But, "I have to know your definition of subsidies because it's a careless term and it's misused," he said.
Tax credits for example are fine, Paul said, because "if I give you back your money, I'm not giving you my money or somebody else's money. If you get a tax credit, I'm just letting you keep more of your money. If somebody gets a check from the government or gets a mandate that's different."
This article first appeared on POLITICO Pro at 5:37 a.m. on June 3, 2011.
Once again, Sarah Palin leads the way with honesty and courage, i.e. eliminating all government energy subsidies. She’s right, even if Iowa primary/caucus voters don’t like it.
I hear the ag radio network on the way to work sometimes in the morning. They spend 75% of the time talking about how they’re working in DC to get more money from the government. Pretty disgusting that rural farmers are a big part of the problem with spending in this country.
Corn ethanol producers and farmers are no more worthy of government subsidies than oil companies or failing car companies. Corn ethanol is a boondoggle that does nothing to cut our oil dependance and is nothing more than a popular farm program. However without the massive government subsidies from seed in the ground to the gas pump, ethanol blended gasoline would be more expensive than regular unleaded and that combined with the reduced miles per gallon from any ethanol blend the market would reject it.
Spot on. In fact, let's do away with all corporate subsidies such as those for ethanol, oil, agri, steel, autos, etc. While we're at it, let's just piss everyone off and do away with all other subsidies such as homeowners deduction for interest and other investments. Oh yeah, let's not forget the infamous earned income credit, child credit (not to be confused with the dependent deduction. I say let's clean out the whole corrupt mess. And, then, let's go to a flat tax. what do you say, who's with me...!!
Several of the new Tea Party congresscritters support ethanol subsidies, because they are from farm states.
Sarah is unusual, very unusual, because she has a history of turning down federal subsidies to her own state, when she was governor of Alaska.
Very few politicians have ever actually done that. They talk about it, but then they say, “Well, I have to do it for the people of my state. After all, it’s other people’s money.”
Sarah has already proven that she will keep her word. Not sure I trust any of the others to do so.
Yeah, but most of them want the rest of us to put in our gas tanks....... >PS
This is the Politico trying to make us think all politicians are alike.
Actually,even tiny Tim Pawlenty even has come out against ethanol, as has Palin and Cain. (this is why I think Palin and Cain have an advantage against Bachmann, who is unusually on the wrong side of this issue).
The Iowa Caucus is the only reason we have this boondoggle to begin with. I think 2012 is when many Republicans will give Iowans tough love on this issue and it’s a good thing.
Newt and Mitt are just being typical 2008 and earlier politicians. That recipe quit working in 2010 and it ain’t coming back.
Yet another reason I won't be supporting any of the frigging RINOs.
Sarah's got it right.
Quit burning our food!
Ethanol is expensive to produce, unstable to use (absorbs water) and screws with an engine's internals (corrodes seals, etc.)
Ethanol is a loser. Time to admit it.
I wonder what a REAL gallon of Ethanol would cost if we didn't have to artificially suppress the price with our tax dollars.
“let’s go to a flat tax. what do you say, who’s with me...!! “
I’m with you. I’m 65, 3/4s of my working life self-employed. No dependents. Paid cash for my house. I never get any sort of break! And,,, I want all Republican Primaries to be held on the same day. And closed to only Republicans. I’m sick and tired of being dictated to by Iowa and New Hampshire. We’re gonna get screwed again, and Mitt is gonna be forced on us. Just you all wait and see! I’m disgusted!
“Newt and Mitt are just being typical 2008 and earlier politicians. That recipe quit working in 2010 and it ain’t coming back.”
You’re on target. No more distribution of other people’s money. If people want to support ethanol, buy stock and prove your product in the market.
>>> I want all Republican Primaries to be held on the same day. We’re gonna get screwed again, and Mitt is gonna be forced on us. Just you all wait and see! I’m disgusted! >>>
Actually, all primaries on the same day is what would give us Mitt, since he has the money and the name recognition. Be careful what you wish for.
Technically she said they need to be "relooked at" not that she'd eliminate them all. There's wiggle room in her statement.
Well, I am no fan of Romney either. Although he proclaims to have recently experienced a “born again” conversion to conservative orthodoxy, I am skeptical. I think if he should be elected POTUS he would instinctively revert to his political basic instincts - which are center/left. So, hopefully, he will not survive the primaries. Let's keep our fingers crossed.
“Paul told POLITICO that doesn’t believe in energy subsidies. But, “I have to know your definition of subsidies because it’s a careless term and it’s misused,” he said.
Tax credits for example are fine, Paul said, because “if I give you back your money, I’m not giving you my money or somebody else’s money. If you get a tax credit, I’m just letting you keep more of your money. If somebody gets a check from the government or gets a mandate that’s different.”
This is actually correct. A tax credit is not the same as a subsidy. The Democrats are trying to claim that tax credits to oil companies are the same as subsidies, but they’re not. A tax credit is simply an example of the government giving a company their own money back.
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