Trump wants to increase taxpayer subsidies of ethanol, Cruz wants to end them

Donald Trump should stick to Miss Universe pageants
Donald Trump should stick to Miss Universe pageants

Donald Trump is pandering to ethanol special interests, trying to catch up to Cruz in Iowa.

The Wall Street Journal explains:

Donald Trump, who is battling Sen. Ted Cruz (R., Texas), for the top spot in in corn-rich Iowa, is seeking to draw a contrast between the two candidates by catering to the state’s corn ethanol industry more than any other top GOP candidate.

[…]“I am there with you 100%,” Mr. Trump told a crowd of hundreds of Iowans whose livelihoods depend on the ethanol industry at a summit in Altoona, Iowa, on Tuesday. “You’re going to get a really fair shake from me.”

Corn has long been king in Iowa, the nation’s top corn-producing state, implanting in Iowa voters a sentiment that every candidate must cheer Washington’s backing for ethanol. Since 2011, though, that universal backing has been eroding.

Congress decided at the end of 2011 not to renew a tax credit that cost the government $6 billion a year. Critics of the government’s ethanol policy then set their targets on the ethanol mandate, which requires refineries to blend an increasing amount of biofuels into the U.S. gasoline supply each year.

At the ethanol summit Tuesday, Mr. Trump also read a prepared statement opposing Congress “changing any part of the RFS,” or Renewable Fuel Standard, the mandate’s formal name.

Trump doesn’t just want to keep the subsidies as they are, he wants to raise them, according to this article from The Hill.

It says:

Donald Trump said Tuesday that federal regulators should increase the amount of ethanol blended into the nation’s gasoline supply.

Speaking at an event hosted by the Iowa Renewable Fuels Association, Trump, a real estate mogul and the front-runner for the Republican presidential nomination, said the Environmental Protection Agency (EPA) ought to follow the ethanol volumes Congress set in 2007.

“The EPA should ensure that biofuel … blend levels match the statutory level set by Congress under the [renewable fuel standard],” Trump said.

The mandate is popular in Iowa, which hosts the nation’s first caucuses.

He is pandering to the people he speaks to wherever he goes… he has no convictions.

Ethanol doesn’t lower the price of gas, it actually raises the price of food, since some crops are being redirected to an inefficient process. It’s a handout to ehtanol producers, at the expense of gas consumers who must pay more for an inferior product.

Texas Senator Ted Cruz
Texas Senator Ted Cruz

Ted Cruz is different:

In a Des Moines Register op-ed Wednesday, Cruz said he would look to “phase out the Renewable Fuel Standard, end all energy subsidies, and ensure a level playing field for everyone,” a move that would eventually end the mandate that requires oil refiners to mix biofuel into their gasoline supplies.

“My view on energy is simple: We should pursue an ‘all of the above’ policy,” he wrote. “We should embrace all of the energy resources with which God has blessed America: oil and gas, coal, nuclear, wind, solar, and biofuels and ethanol. But Washington shouldn’t be picking winners and losers.”Cruz has previously said he would look to end the mandate by 2022, phasing it out over five years, if elected to the Oval Office.

Cruz leads Republicans in Iowa polls ahead the caucuses there next month, but his ethanol policies could hurt him in the state, which leads in the fuel’s production.

The senator from Texas has previously co-sponsored a bill to end the ethanol mandate immediately. Last spring, he sponsored a phase-out bill, and he says that plan is the best way to support fuel producers.

Going into Iowa and taking on the ethanol subsidy takes balls of steel. And Cruz has them.  He is risking the entire election on doing the right thing for the country as a whole, instead of pandering.

Cruz is trying to shift the public to the right – explaining basic economics to them, and asking them to give up their special interests in order to return to the vision of the Founders for America. Will it work? I think someone ought to try to remind us what America is supposed to be like.

There is a very good explanation of why ethanol subsidies are crony capitalism, by conservative firebrand Mark Levin.

Here’s a summary:

Levin explained what crony capitalism is. That it is the state picking winners at the expense of others.  In the case of ethanol they have made it mandatory in cars, even though it is proven that it does not reduce oil usage, because oil is needed for the production of ethanol.  That it hurts engines.

The most damaging thing that ethanol does, according to Levin is add to famine and poverty in the third world, by limiting the production of food crops, as the land is used to grow ethanol feedstock instead of food.

Levin focused on the fact that Donald Trump is going all in for ethanol to pander to Governor Terry Branstad in Iowa.  He told his audience that Branstad’s son makes a living from the ethanol industry.

There are fundamental economic issues at play here. We are harming our economy and destroying our long-term prosperity the longer we allow socialists to run our economy. Things can be good in this economy. We can get the jobs we want, cheaper prices, higher quality. We can have social programs that work, and greater individual freedom. But we have to go back to our founding principles. That is what made us great, and what can return us to greatness. We did not become the wealthiest nation on the Earth by accident. When all else has failed, why don’t we try doing what worked for the last 200 years?

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