• Cloakroom Confidential: Grassley ‘Tax Extender’ Scheme Helps Cronies, Hurts Taxpayers

    Sen. Chuck Grassley (R-Iowa) just can’t help himself. He is intent on using the power of the federal government to prop up biofuels production to help farmers in his home state. This is an inefficient allocation of resources and rank crony capitalism.

    Grassley is pushing for two crony ideas.

    First, the Iowa senator wants to use government mandates to make sure that Iowa farmers have a government mandated market for farmers grown biofuels.

    He has teamed up with other Farm State senators to push for the Environmental Protection Agency to increase the biofuels mandate in the 2016 Renewable Fuels Standard (RFS). Grassley has communicated to EPA Administrator Gina McCarthy that he is upset at the way the EPA crafted the new RFS and he wants the government mandate strengthened.

    The RFS was created in 2005 and requires that renewable fuels be blended with set at a percentage agreed to by the EPA. The EPA was considering lowering the standards because of alack of the ability of engines and infrastructure to handle more ethanol in the fuel supply.

    According to the Iowa Muscatine Journal, “(Iowans) join members of our state’s congressional delegation in calling for a hearing in Iowa and urge them to remain aggressive in support of the RFS. Because Iowa ranks first in the nation for ethanol production and second for biodiesel production, no one state would suffer the impact of EPA’s misguided proposal more than ours.” Iowa really wants the standard maintained at a high level so they can grow renewable fuels.

    Furthermore, the EPA put out a rule to allow Argentinian fuels to be imported because Argentinan biodiesel more easily meets EPA’s criteria for an “advanced biofuel.”  American farmers producing biofuels don’t like the competition and they hate that they have another competitor under the mandate.

    This further aggravated the protectionists who want to mandate that Iowa biofuels, not foreign fuels are part of the mandate. Farmers protected by the government are getting mad that foreign competition is seeping into U.S. markets.

    The second idea that Grassley is pushing is to use the power of the federal government to use the tax code for social engineering and providing subsidies to Iowa farmers to grow more biofuels.

    Every year the so called “Tax Extenders” bill comes before Congress. It is one of the quieter bills that pass Congress every year, yet it is loaded with special interest provisions for lobbyist in DC. Grassley is pushing to restore an expired tax credit for wind and biofuels as part of the bill.

    The Tax Extenders bill will continue previous tax credits for renewable energy and for wind. Grassley pushed an idea to convert a biodiesel fuel credit to a $1 per gallon production credit. He is worried that foreign entities benefit from the biodiesel fuels credit, so he wants to promote another protectionist tax idea to prevent foreign farmers from benefitting through the tax credit. A better idea would be to scrap the credit and stop the social engineering.

    It is so sad when Republicans sent to Washington go native and try to use the power of the federal government to mandate and tax in a way that helps special interests in their home state.

    EPA is proposing to set the RFS mandate at a level of required ethanol consumption that exceeds what engines and infrastructure can handle.  This hits saturation point known as a blendwall and hitting it risks damage to consumers’ small engines like those on boats, lawnmowers, chainsaws and snowmobiles and even older cars.

    Of course, even this is not enough for the corn crowd.  Consumers be damned! Big Corn and their Senator – Chuck Grassley – wants to force you to use more of their food laced fuel.

    Hopefully, Grassley fails in his crony capitalism attempt to funnel government goodies to his pals in Iowa.



    Cloakroom Confidential

    Cloakroom Confidential was a longtime Capitol Hill staffer and insider who has contacts in the House and Senate at the highest levels.

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