Ethanol subsidies could be next target in race to cut federal spending

After scoring a victory by getting their party to commit to cutting earmarks, some anti-spending Republicans are pointing to federal ethanol subsidies as their next target. Republican Sens. Jim DeMint of South Carolina and Tom Coburn of Oklahoma say "they are calling on fellow Republicans to urge Congress to allow ethanol subsidies to expire -- something that could put other leading GOP Senators in an awkward spot and subject them (in theory) to the wrath of the anti-government-spending Tea Party if they don't go along," Greg Sargent of The Washington Post reports on The Plum Line blog.

The ethanol subsidies may be the perfect test for the seriousness of Republican calls for spending cuts as some senators like Orrin Hatch of Utah and Chuck Grassley of Iowa have previously supported them. "Government mandates and tax subsidies for ethanol have led to decreased gas mileage, adversely effected the environment and increased food prices," DeMint told Sargent. "Washington must stop picking winners and losers in the market, and instead allow Americans to make choices for themselves." Colburn added, "We need to let the ethanol subsidies expire and we need energy developed based on market forces."

"What we need to quit doing is digging the hole deeper," Coburn said. "I thought a lot of Americans said that on November 2nd. There shouldn't be anything that's sacrosanct." The ethanol subsidy debate also represents a unique coalition between Republicans and environmental groups, who also favor ending the subsidies, Sargent writes, adding it could also be an opportunity for Democrats to exacerbate GOP divisions. (Read more)