Bob Barr Still Supports Ethanol Subsidies

by Brian McGraw on December 2, 2010 · 2 comments

in Energy

In a piece on The Hill’s Congressional Blog, former Republican congressman and the 2008 Libertarian Party presidential candidate Bob Barr expresses support for the extension of a tax subsidy enjoyed by the ethanol industry, the Volumetric Ethanol Excise Tax Credit (VEETC).

Accusing someone of being a shill for industry is not a light accusation, but as a conservative/libertarian, Barr’s support is puzzling, and contrary to his previous positions, to the extent that I can see no other explanation other than having a financial interest in supporting ethanol subsidies:

In April of 2009, Barr referred to ethanol as “that still-active ethanol subsidy scam.

In September of 2008, Barr wrote: The federal government should eliminate restrictions that inhibit energy production, as well as all special privileges for the production of politically-favored fuels, such as ethanol.

Unless this website is out of date, Barr is a senior member in a public relations/consulting firm named Liberty Strategies, Inc., so its certainly possible that one of their clients is the ethanol industry.

One of Barr’s main points, that conservatives ought to be against the expiration of the credits because they would represent a tax increase, is a poor argument. He cites a Americans for Tax Reform statement that support for the expiration of these tax credits goes against their pledge not to increase tax rates (or reduce tax credits without lowering taxes elsewhere). ATR posted a response today:

Using the expected 2010 baseline as our metric to determine whether or not a piece of legislation (in this case the extension of the VEETC, or said another way, the reissuing of a tax credit) is in violation of the pledge, we can see that reauthorizing the VEETC would be a tax cut. Thus, if legislators choose not to reauthorize the tax credit, they are not in violation of the pledge as they are keeping revenue consistent with current 2010 projections.

Their statement is somewhat confusing, but the last sentence makes their position clear.

The failure of corn ethanol has been repeated ad naseum on this blog and by most everyone who doesn’t have a financial interest in the industry. A recent letter (pdf), signed by a number of free-market groups (including CEI) as well as environmental organizations — a rare occurrence – ought to convince our politicians that these subsidies are bad policy, despite Barr’s assertions.

For Obama Against Et December 2, 2010 at 11:03 am

Thank you for the ethanol article. It is amazing to me that more national newspapers and NPR are not reporting on the ethanol story at this critical time. News organizations ignoring ethanol has been a problem for years, but I thought Al Gore's recent admission and the new and odd anti-ethanol coalition (followthescience.org) would have brought on a change.

A handful of us have fought to keep two successive corn ethanol plants from being built on farmland on the banks of the Susquehanna River in Lancaster County, Pennsylvania. Getting press on the ethanol wars has been extremely frustrating. Even when we had juicy details, like the Alexander Strategy Group contacting us in a dark alley and offering to help fight off the first ethanol plant which was being pushed by Pennsylvania Governor Ed Rendell, we got no coverage. The second plant (also pushed by Rendell) we battled was being funded by Cilion (Vinod Khosla, Jeff Skoll (ebay), Yucaipa Companies (Ron Burkle, Steve Bing the Ruler of Dubai, and a Chinese Media Company) and Richard Branson/Virgin. Ron Burkle, of course, raised lots of money for Hilary Clinton, who Governor Ed Rendell supported. And at the time the Clintons, via Yucaipa, were invested in a Brazilian ethanol plant that was accused of slave labor by the Brazilian Labor Ministry.

It seems that a new approach is needed to stopping the proliferation of ethanol, a wasteful and environmentally damaging false solution. Most national news organizations have fallen down on the job of reporting on ethanol. I really think many people have been environmental sheep, just following the herd and supporting ethanol because it sounds green.

Charlie Peters December 2, 2010 at 3:30 pm

Corn fuel ethanol stinks

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