Pawlenty of Love for Corny Bravery

Spent part of my midday watching former Minnesota Gov. Tim Pawlenty on the internets announcing his candidacy for president of the U.S. of A.

During his remarks in Des Moines, with the golden dome of our Capitol glistening behind him, Pawlenty said he supports gradually phasing out federal subsidies for our golden corn-based ethanol. He's not afraid to tell hard truths. "Someone has to say it," he said, after saying it. And he's a Midwesterner, too. Only T-Paw can go to Cargill.

The national political media will declare him so, so brave in three, two one...

First, The Daily Caller:

To show how serious he is, in his announcement speech in Iowa Pawlenty did just that, telling Iowans the unspeakable: that their beloved ethanol subsidies must come to end.“I'm here today to tell Iowans the truth, too,” he said. “… The truth about federal energy subsidies, including federal subsidies for ethanol, is that they have to be phased out. We need to do it gradually. We need to do it fairly. But we need to do it.”

“I'm here today to tell Iowans the truth, too,” he said. “… The truth about federal energy subsidies, including federal subsidies for ethanol, is that they have to be phased out. We need to do it gradually. We need to do it fairly. But we need to do it.”

Unspeakable! Then, The Hill:

GOP presidential candidate Tim Pawlenty said Monday he wants to phase out federal ethanol subsidies, which are considered a sacred cow in Iowa.In formally launching his campaign for the White House, Pawlenty, the former governor of Minnesota, said the subsidies need to be gradually eliminated as part of an effort to reduce the federal budget deficit.?"We need to cut spending, and we need to cut it…big time. The hard truth is that there are no longer any sacred programs," he said during a town-hall event in Des Moines. "The truth about federal energy subsidies, including federal subsidies for ethanol, is that they have to be phased out."We need to do it gradually. We need to do it fairly. But we need to do it."

In formally launching his campaign for the White House, Pawlenty, the former governor of Minnesota, said the subsidies need to be gradually eliminated as part of an effort to reduce the federal budget deficit.

?"We need to cut spending, and we need to cut it…big time. The hard truth is that there are no longer any sacred programs," he said during a town-hall event in Des Moines. "The truth about federal energy subsidies, including federal subsidies for ethanol, is that they have to be phased out.

"We need to do it gradually. We need to do it fairly. But we need to do it."

Sacred cows, gored. Next, Chris Cillizza from the Post of Washington:

In announcing his campaign for president in Iowa Monday, former Minnesota governor Tim Pawlenty placed a big bet on boldness.He called for a phasing out - albeit gradual - of federal ethanol subsidies, a move long considered a political death wish in a state with such a large agricultural community.

He called for a phasing out - albeit gradual - of federal ethanol subsidies, a move long considered a political death wish in a state with such a large agricultural community.

A death wish, gradually.

But here's the thing. Ethanol subsidies are not really politically sacred in Iowa, at least not anymore. It's easy to find Iowans who have come to the conclusion that, after decades of subsidizing ethanol, it's probably time for the industry to fish or cut bait. We use the fuel, we support farmers, but we understand that you can't prop up an industry forever. And it can likely survive without the tax break.

Iowans are not in lockstep on his issue. At the Statehouse, for example, strong resistance has repeatedly killed the idea of mandating the use of ethanol blended gas in Iowa.

We'd also like to see fat federal subsidies for oil, etc., also get the heave-ho. Pawlenty is right to say all subsidies are fair game for slicing and chopping. Good to hear.

The textbook notion that John McCain was doomed here because of his ethanol positions ignores other factors . For one thing, he never really ran a full-scale campaign here. That's no problem for Pawlenty, who is already a permanent fixture in Iowa. Mary Pawlenty did say her husband has experience leading Minnesotans "to a better place." No worries, we've got room.  

The landscape has changed. U.S. Sen. Chuck Grassley, a longtime staunch defender of ethanol, has his own plan for gradually phasing out subsidies.

The bill, introduced Wednesday (May 4) by Sen. Chuck Grassley, R-Ia., is a bid by the industry to retain some government support but at a lower cost that will have a better chance of keeping congressional support. The bill combines elements sought by different industry trade groups. The industry's political support has been slipping amid skyrocketing prices for corn and rising food costs.The 45-cent-per-gallon tax credit that goes to refiners that blend ethanol with gasoline is scheduled to expire at the end of this year.Grassley's proposal would cut the credit to 20 cents in 2012 and then to 15 cents in 2013. From 2014 through 2016, the credit could be as high as 30 cents if the price of oil is $50 a barrel or below but would fall as crude prices rise. At $80 oil, the ethanol credit would drop to 6 cents and would disappear when oil reaches $90. As of late, oil prices have been running well over $100. The subsidy would expire after 2016.

The 45-cent-per-gallon tax credit that goes to refiners that blend ethanol with gasoline is scheduled to expire at the end of this year.

Grassley's proposal would cut the credit to 20 cents in 2012 and then to 15 cents in 2013. From 2014 through 2016, the credit could be as high as 30 cents if the price of oil is $50 a barrel or below but would fall as crude prices rise. At $80 oil, the ethanol credit would drop to 6 cents and would disappear when oil reaches $90. As of late, oil prices have been running well over $100. The subsidy would expire after 2016.

So Pawlenty's brave strike at our "sacred cow" puts him on the same page as perhaps the Senate's biggest proponent of corn-based fuels. Pawlenty is riding a wave that's already underway.

The real question is if the tax break for ethanol goes away, what will the federal government do with the revenue? Will it disappear in the bureaucracy or will it be spent on developing renewable fuels beyond corn-ethanol? Ending subsidies shouldn't end government efforts to find homegrown energy sources.

Next, Pawlenty's going to Florida to call for Social Security changes and to Wall Street to say the era of bailouts is over. So more boldness to come.