Charles Grassley

The hand writing was already on the wall last December even though Congress extended the Volumetric Ethanol Excise Tax Credit (VEETC) for another year.

As explained here, ethanol’s policy privileges lost their perceived legitimacy. Beef, hog, poultry, and dairy farmers objected that ethanol policy inflates livestock feed costs, making their products less competitive in global markets. Humanitarian organizations objected that ethanol policy aggravates world hunger by driving up grain costs. Environmental groups objected that corn ethanol production damages water quality and, on a life-cycle basis, probably emits more carbon dioxide than the gasoline it replaces. Budget hawks objected to Congress lavishing billions on a favored few in the midst of a budget crisis. Free market groups objected to the fleecing of consumers compelled to buy a product that delivers less bang for buck than gasoline.

The corn lobby could rally its congressional patrons one last time, but the ideological climate had shifted against them, with even Al Gore recanting his earlier support for ethanol subsidies. If the VEETC had come up for renewal in Dec. 2009, Congress would likely have extended it for five years, not just one. But in 2010 a broad-based Left-Right coalition arose to challenge King Corn, and the tide turned. [click to continue…]