The ethanol mandate, also known as the Renewable Fuel Standard, is an indefensible subsidy to an industry based in Iowa. The biggest ethanol players are power brokers in the state, which plays a central role in the nominating process of both parties. The result: a gravitational pull to pander that draws in even politicians who know better.
The RFS, created by George W. Bush, requires refiners to dilute their gasoline with ethanol, a fuel made from plants — mostly corn. This drives up demand for corn, and enriches the politically connected ethanol barons, like Iowa GOP powerbroker Bruce Rastetter. It also costs Americans money at the pump and in their grocery bills. It's devastating for ranchers (it drives up the price of cattle feed) and environmentalists say it causes pollution and sucks up too much water.
Why does the mandate exist? Because of the Iowa caucuses.
When Chris Christie is in New Hampshire, he criticizes Hillary Clinton for "wanting to pick the winners and losers," and adds, "I want the free enterprise system."
When Christie—endorsed by Rasteter—Is in Iowa, he says, "We should enforce the Renewable Fuel Standard."
When speaking about Obamacare, Dodd-Frank and Wall Street, Carly Fiorina says, "The people that the federal government favors now are the big, the powerful and the well connected."
When I asked her about ethanol a few minutes later, Fiorina answered, "I've been very clear that I support the Renewable Fuel Standard as it currently stands."
Fiorina says she would let the RFS expire in 2022, as prescribed in current law. That's a common answer among Republican candidates, and it's a cop-out. Literally, it means, I support the federal ethanol mandate.
Marco Rubio makes the same argument, a bit more obliquely: "The Renewable Fuels Standard is not something that I would have voted for had I been in the Senate, but it is now existing law and I think it would be unfair to simply yank it away from people that have made investments based on its existence."
"If there's ever an area where I've been willing to use government to assist an industry," Rubio has said when asked about ethanol, "it's been agriculture."
Jeb Bush is cagey about his ethanol views, but states, "I think, ultimately, we need to get to a point where there aren't winners or losers based on subsidies or mandates or anything else." "We need to phase that out over the long haul," Bush said on another occasion.
There's some logic to that argument — people have invested in ethanol based on the idea that the government will force Americans to buy ethanol. Maybe it's unfair to change the rules so rapidly.
But it's an odd argument: We've been robbing from Peter to pay Paul, and Paul's taken out a mortgage based on income from the theft. You don't want Paul to lose his house, do you?
Anyone who has paid attention to Congress knows that a 7-year sunset is not a real thing. Recall the temporary Production Tax Credit for wind, which Congress has extended, was allowed to expire, and then renewed retroactively. Recall the "Freedom to Farm Act," which Republicans passed in the late 1990s, which was supposed to phase out farm subsidies, but which a later Republican Congress undid.
Promising to let a special-interest subsidy expire in your second term doesn't count as opposing the subsidy. You can tell this isn't real opposition, because the industry lobbyists are fine with it.
Ted Cruz takes a moderate course: He proposes a 3-year ramp-down of the RFS. This is different in kind, not merely degree, from the Fiorina-Rubio position. Cruz is saying that he will advance and sign legislation to scale down the mandate. What Fiorina supports, and Rubio and Bush imply, is a passive approach — let things run their course. Also, Cruz would see the mandate gone in his first four years, unlike the 2022 crowd.
For his sins, Cruz has incurred the wrath of the ethanol lobby. America's Renewable Future, an ethanol super political action committee, is running radio ads around Iowa blasting Cruz as a hypocrite: "Politicians like Ted Cruz support subsidies for Big Oil, but want to end support for ethanol."
The ethanol industry points to a handful of tax provisions that range from clear oil subsidies (Cruz supports abolishing these) to murkier instances. Conservatives like Cruz would be well served to aggressively target all oil preferences, even separate from a broad tax reform.
But even then, the ethanol lobby wouldn't give up its mandate. Even industry champions admit that oil companies would never allow ethanol to be blended with their gasoline unless the government forced them. "Until we can have a level playing field," Iowa Lt. Gov. Kim Reynolds told me in Cedar Rapids, the mandate "is the right approach."
Republicans in recent years have declared themselves the enemies of corporate welfare. In the abstract, most of them are. But in real life, every subsidy, mandate, and protective regulation has a lobbyist and an excuse behind it. A candidate who believes in free enterprise will see through those excuses.
When it comes to most corporate welfare, Rubio, Bush, Fiorina, and Christie reject industry excuses. In Iowa, those same politicians are bit more credulous.
Timothy P. Carney, The Washington Examiner's senior political columnist, can be contacted at firstname.lastname@example.org. His column appears Tuesday and Thursday nights on washingtonexaminer.com.