-By Ryan Grim
June 13, 2011- Opponents of ethanol subsidies got a boost Monday from Koch Industries as the company announced its opposition to the giveaways on the eve of a major vote in the Senate.
Sen. Tom Coburn (R-Okla.) is pushing a vote on an amendment Tuesday that would end ethanol subsidies and eliminate tariffs on foreign supplies of the biofuel. That would allow companies to use sugar-based Brazilian ethanol, which is cheaper than the domestic corn-based variety, though presents environmental challenges.
Ethanol is a key national issue for the GOP because of the importance of Iowa's early caucus to the presidential primary. Former Gov. Jon Huntsman (R-Utah) is skipping the state, he has said, because his opposition to the subsidies is toxic in the state. The issue has split the Republican Party, with free market advocates and deficit hawks pushing for elimination of the subsidies and corn-state politicians fighting back.
The conservative power broker Grover Norquist has battled Coburn, arguing that ending the handouts is equivalent to increasing taxes, meaning that candidates who signed a no-new-taxes pledge would be breaking their word. He has charged that Coburn "lied his way into office."
Norquist has been critical of Coburn and other Republicans who have highlighted the yawning federal deficit, arguing that the focus should be on reducing spending rather than trimming the national debt. He worries that if the American people are forced to choose between the two ways of reducing the deficit — tax hikes or spending cuts — they'll eventually pick tax increases.
While the Kochs are public about their politics and occasionally engage directly with legislation, it is rare for the Kochs to get in the trenches with a letter on a specific amendment as they've done in Coburn's case. But it might not be enough to get his amendment over the top. In order to get a vote on it, Coburn pulled a procedural move that irked Senate Majority Leader Harry Reid (D-Nev.), who responded by calling on his caucus to oppose the amendment on procedural grounds.
Coburn said that such a move will put Democrats on the wrong side of public opinion. "Go home and explain to your constituency you didn't vote on a bill, an amendment, because you didn't like the way it was brought up, regardless of the substance," he told HuffPost on Tuesday before the vote. "Rule 22 allows any senator to offer an amendment, so I didn't do anything out of the ordinary. The only reason I used that procedure is because they don't allow us to have any votes."
Coburn and Koch Industries have been in discussion about the political issue for several months. But ultimately, the company says, the Koch's commitment to free-market principles overrides the fact that their company benefits from the subsidies.
"Koch Industries has opposed federal mandates and subsidies for decades," the letter to Coburn, written by the Kochs' lobbyist, reads. "Our aim is to create a free market where consumers decide winners and losers based on which products they decide to buy, instead of government picking winners and losers based on which friends or products it chooses to subsidize. One such government intervention is the tax credit that provides about $6 billion each year to blenders of ethanol."
"We hold this position despite the fact that we benefit from these tax credits," the letter points out.
Koch Industries will, however, continue to exploit the credits, if they aren't repealed.