The Nation's Pulse: Corny Newt
Dealey, Sam
by Sam Dealey Corny Newt sage, and Gingrich's appointments to the Are ethanol subsidies fueling a presidential run? House-Senate conference committee were a transparent rigging to ensure the...
...Others allege their subsidy pales in comparison to the tax breaks Big Oil has received over the years...
...ADM and ethanol would seem to fit in there somewhere...
...ed to reconcile the two bills for final pas- members and informed them the corn66 July 1998 • The American Spectator mittee's position was going to be overruled by the speaker...
...In closed-door deliberations with Gingrich and Grassley, the chairman reportedly offered a compromise plan to extend the subsidy until 2,003...
...By far the biggest advocate of the ethanol subsidy is agribusiness giant Archer-DanielsMidland Co., which, among its many operations, produces 5o percent of all ethanol...
...As who seeks to get the votes [to run against you.' And then they'll tell Livingston, 'If Rep...
...Jon Christensen said back in '95, "It me...
...Gingrich Livingston had already assembled an Senate in mid-March was a continuation subsequently appointed Reps...
...Take the explained Gingrich's parliamentary move Washington double-speak, immediately issue of energy policy, where Gingrich is as "sort of a deviation from usual congreslaunched two campaigns: one for his all- pushing an unsound idea in hopes of secur- sional procedure," but Archer offered a but-guaranteed congressional re-elec- ing votes in the Iowa caucuses...
...The corn-hucksters also offer a vision from Thomas Malthus or The Road Warrior, warning that in fifty years the earth will be sucked dry of all her oil...
...Jim Nussle influential 12-member whip team, of a Spo million-per-year, 5.4 cent-per-gal- and Kenny Hulshof, the lowest-ranking amassed a substantial speaker campaign lon federal tax credit for ethanol —good member on Ways and Means, in their stead...
...N. 68 July 1998 • The American Spectator...
...It's just a never-ending spiral...
...Julian Simon taught us that when things are getting cheaper over time we've got a more abundant supply of the resource, not more scarce," he says, and rattles off about new extraction technology, new oil reserves we couldn't get to before, and price-drops from $50-per-barrel in the late 70's to $17-perbarrel today...
...If all subsidies are inefficient economically, you won't do anything for the economy to litter it with subsidies to offset old subsidies...
...The push for ethanol, says Moore, "is just a residue of the idiotic economic policies we put into effect under Jimmy Carter in the 1970's...
...fund, and received promises of votes from through 2007...
...They said they thought the seniority of the committee ought to be honored," said the source...
...News accounts at the time suggested that he had done so for Bob Dole's benefit, and Gingrich conciliators say it's possible he's doing much the same thing this time around: in a $1.6 trillion federal budget, $600 million a year is a paltry sum to ingratiate the Midwest to the GOP and ensure that Republicans at least hold control of Congress...
...Five months later in September he saved them...
...By contrast, the ethanol industry is only slightly regulated, and enjoys further subsidies in many states...
...And House Minority Leader Dick Gephardt fired off that Archer "has stymied the expansion of the ethanol industry for the last three years, while protecting preferential treatment for the oil and gas industry...
...The decision may already has intensified...
...And then there's natural gas," an alternative fuel source that has actually caught on in the economy...
...until then the pre- Means committee, Archer and Rep...
...The suspicion of a Gingrich presidential run is bolstered by a look at ethanol's boosters: who's getting their campaign money and, more telling, who's not...
...John Ashcroft supports the subsidy, as does George Bush, the governor of Texas, where the only conceivable time oil and corn might mix is in preparation for a barbecue or national politics...
...And Archer was hardly implacable in the matter...
...Ethanol is made from corn, and Iowans—roughly 90,000 of them—make a lot of corn...
...Or so goes electoral science, and with the ethanol subsidy firmly back in place, speculation about a Gingrich campaign only increased...
...Phil Gramm, and House Budget chairman John Kasich to lop billions of dollars worth of corporate welfare and agriculture subsidies from the federal budget...
...Grassley, who appeared to be positioning himself for agriculture secretary in a Gingrich cabinet, lauded the speaker as the "undisputed champion for the American farmer," and, borrowing a line from the Dole campaign (which is a sure way not to become agriculture secretary), assured these businessmen, "I'm here to tell you [Gingrich] is a man of his word...
...T he ethanol subsidy is indicative of questions that have been raised about the speaker's consistency in action and rhetoric...
...The measure wasn't in the This did not wash well with the nearly ioo colleagues...
...Other presidential aspirants, declared and otherwise, also show a weakness for ethanol...
...Philip ingston reportedly received an sumptive heir, had been overtaken...
...Scare-mongering," counters another Cato specialist, Stephen Moore...
...But Congress need- called a meeting of all the Ways and Means ofThe American Spectator...
...But the eye-for-an-eye defense is hardly a convincing one...
...With the first 2000 presidential caucus, Iowans also make presidential front-runners...
...House-Senate conference committee were a transparent rigging to ensure the ethanol subsidy stayed in place...
...Indeed, just hours after announcing the subsidy's salvation, the speaker, flanked by Iowa Sen...
...percent of marketable fuels), so it's a bit of a reach to pin its failure on Archer's "stymieing" these past three years...
...plans and hung in for another term, and will make a decision by Labor Day 1999...
...Identified as "temporary," the ethanol subsidy has been kicking around for thirty years and the industry still hasn't taken root (it currently accounts for only...
...Electoral politics seems more likely...
...Vice President Gore joined Agriculture Secretary Dan Glickman at a radio address for the first time on April 20 to let it be known that he's a big fan of the subsidy, too...
...Livingston, an n-termer who's idential race—and that his candidacy is to offset their opposition...
...Which is all to say that the speaker's hardball was no small thing, and that he really wanted the ethanol subsidy—so much so that he was willing to turn the House Ways and Means committee on its head to get it...
...But there are plen- expanded the negotiations to include as choose sides in the struggle for his suc- ty of signs that the Georgian is in the pres- many ethanol-friendly members as needed cessor...
...In the 1996 cycle, when Gingrich again saved ethanol from Archer's red pen, ADM contributed $98o,000— but not a cent to Gingrich...
...Within a matter of days billion transportation bill approved by the itics will triumph over policy...
...gressman from the trenches was suggesting may not have to decide whether to step And the fighting over Gingrich's seat ways his colleagues play off the contenders' down as speaker...
...Preferential treatment...
...One com advocate been around long enough to understand affecting his job performance...
...S o what's Gingrich's angle...
...In April 1995 Gingrich endorsed an effort led by the likes of then-Labor Secretary Robert Reich, Sen...
...Apparently it was not good enough," was all a committee spokesperson would comment...
...Meanwhile, an anonymous con- If this keeps up much longer, Gingrich play into your favor on this one...
...Charles Grassley and several corn-belt congressmen, paraded into a Washington luncheon meeting sponsored by Iowa's Siouxland Chamber of Commerce...
...The top two members on the Ways and S everal months ago Rep...
...Ethanol's defenders throw out a litany of dubious economic arguments to justify their boodle...
...Had Archer and Crane remained on the if the speaker decided to launch a presi- Even if he runs, no rules bar him from committee, the speaker would have dential bid in z000, Gingrich would not continuing as speaker...
...The speaker subsequently met privately with at least ten of them who expressed their dissatisfaction over his stifling tactics...
...Crane, declined to take part in the confer-assurance from House Speaker Of course that all depends on whether ence committee after Gingrich made clear Newt Gingrich that if the Louisiana con- Gingrich is running, and publicly he has their declared intent to kill the subsidy gressman reneged on his retirement been noncommittal, indicating only that he would be futile and unnecessarily divisive...
...But principally it ensures that everyone in Iowa The American Spectator • July 1998 67 knows who to thank for the subsidy...
...The best way to neutralize a subsidy is not to hit a counterpoising subsidy," says Jerry Taylor, the libertarian Cato Institute's energy specialist...
...At the time, many members on the committee were "extremely upset about the developments," said a Ways and Means source, and they requested a meeting with Gingrich...
...Bill Liv- Dick Armey (R-Tx...
...And besides, the idea that Big Oil is the beneficiary of lucrative subsidies and handouts is simply false, he says: Most of the supports for the Seven Sisters were repealed in 1986, and, of the few that remain, the regulatory costs imposed on the oil and gas industry far outweigh any tax breaks...
...Agriculture Secretary Glickman claims, "At a time when small farms are struggling, ethanol is providing a critical economic lifeline to many family farms"—never mind that artificially inflating the price of corn, as the ethanol subsidy does, increases the price of feed for cattle, dairy, and chicken farmers, eventually hurting everybody down the food chain...
...So at least we know Gingrich wasn't sticking his neck out for ADM...
...This is not a secret, nor has ADM tried to keep it one...
...I've already got most of the votes sewn you give me this money, I'll support you.'" never hurts to have presidential politics up...
...In fact, in the twenty years the Georgian has served in the House, he hasn't received so much as a penny from Dwayne Andreas or his company...
...Means committee mark-up at chairman Once it became a fait accompli, Archer SAM DEALEY is assistant managing editor Bill Archer's urging...
...In a recent New York Times ambitions to win legislative concessions: be made for him—not least by the voters, interview Livingston threatened, "I can "These guys lie to you...
...clearer perspective, calling it an attempt to tion, and another, tougher one for speak- Tucked inside the massive $20o-plus "stack the decks," and lamenting that "poler in z000...
...Washington was version passed out of the House, having Republican members on the Ways and abuzz with talk that Majority Leader been killed 22-11 in a House Ways and Means committee...
...Someone will tell fed up with unsound public policy and make it very uncomfortable for anybody Armey, 'If you push my bill, I'll support politicians' vainglory...
...Over the past year and a half, ADM has made individual, PAC, and soft-money contributions totaling roughly $325,000—but not a cent to Speaker Gingrich...
Vol. 31 • July 1998 • No. 7
