Start Cutting Federal Spending Here--Stop the Ethanol Subsidy

Dear Freedom Action Activist,

The defeat of so many big-spending Democrats in the election and the Republican takeover of the House is good news. There is now hope that the next Congress will begin to cut out-of-control federal spending.

The main reasons that the Democrats lost is that the American people get it. They understand that the federal government and many state governments are broke. Our elected leaders have spent everything—the mortgage payment, the grocery money, the money for the electric bill, the kids’ allowance, and the coins in the cookie jar. They’ve spent it all on a wild binge, and the American people are left with a huge hangover and a mammoth mess to clean up.

So the Members of the new 112th Congress have their work cut out when they convene in January. In the meantime, the current Congress is coming back next week for a “lame duck” session. Rep. Nancy Pelosi (D-Calif.) will still be Speaker of the House, and Senate Majority Leader Harry Reid (D-Nev.) will still have a big Democratic majority in the Senate. They may well try to do some more damage to the economy before the end of the year. Freedom Action will be watching the lame duck session closely and will e-mail you whenever your voice can make a difference.

There is one action that you can take right now to save taxpayers more than $6 billion a year by ending the ethanol subsidy. I know that $6 billion doesn’t sound like much when the federal deficit last year was $1.3 trillion (that is, $1,300 billion or $1,300,000 million or $1,300,000,000,000). But the only way to cut federal spending drastically is to make every possible cut. And this is one of the few cuts that the lame duck session of Congress might actually achieve because all they have to do is take no action.

The 45 cents per gallon ethanol subsidy will expire on December 31st unless Congress votes to extend it. Ethanol is a colossal boondoggle that raises gasoline and food prices in order to pay off special interests. On top of the 45 cents per gallon subsidy, there is also a federal mandate that currently requires blending 13 billion gallons of ethanol into gasoline.

We believe the ethanol mandate is very bad public policy. But subsidizing ethanol when its use is already mandated is truly insane. It’s time to end the madness by letting the ethanol subsidy expire.

Along with the subsidy is a tariff on imported ethanol. The tariff is in place so that foreign producers of ethanol do not get the subsidy payment. The tariff is also set to expire at the end of the year.

Let’s not wait to begin cutting federal spending until the next Congress starts in January. Let’s take a first step now. Click here to send a message to your Representative and Senators urging them to let the ethanol subsidy expire.

Yours for freedom and prosperity,

Myron Ebell

P. S., Here’s a summary of the congressional election results:

New Senate: 53 Democrats and 47 Republicans for a net loss of 6 Democrats.

New House: 239 Republicans and 189 Democrats for a net loss of 60 Democrats, with 7 races still undecided.

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