Ethanol Can Still Trip Up a Candidate in Iowa (via Minneapolis StarTribune)

Perry’s equivocation after years of opposition shows potency of the issue

Even in Iowa, King Corn is not all that it used to be. But can it still make a presidential candidate waffle?

Few major presidential aspirants have declared themselves an enemy of corn-based ethanol quite like Texas Gov. Rick Perry. Three years ago, he unsuccessfully tried to bulldoze a federal law that, in effect, forces billions of bushels of corn to be converted into ethanol and added to gasoline. He argued that this law forced up the price of corn used to feed cattle and chicken, adversely affecting Texas livestock producers. These included such powerful campaign donors as the East Texas chicken tycoon Lonnie Pilgrim.

In Perry’s then-unambiguous view, the law has done “significant harm” to U.S. households. “Any government mandate that artificially props up a single industry to the detriment of millions of Americans is bad public policy,” he said.

But when Perry, as a GOP presidential candidate, was asked about the ethanol mandate at an Iowa Corn Growers Association meeting in late August, he would not answer questions.

Disproportionate weight

It remains unclear whether Perry still opposes the ethanol mandate and was merely avoiding a politically awkward issue or whether he might have been carving out room to change his position.

Either way, his sudden public equivocation after years of opposition suggests that ethanol retains not just potency as an issue in Iowa’s presidential caucuses but also its power to distort national energy policy, which derives from the state’s crucial first-in-the-nation voting and the vastly disproportionate weight and attention presidential candidates give its voters.

The caucuses are shaping up as particularly crucial for Perry, who was trailing far behind Mitt Romney in polls in New Hampshire, the other early-voting state, even before coming under fire in the last debate over such issues as immigration.

Some other candidates also have opposed policies promoting ethanol, and even a spokeswoman for Romney, who supports “the subsidy of ethanol,” declined to say whether he supported the mandate — a different issue altogether from ethanol’s major subsidy, which is slated to expire soon anyway.

But for Perry and other candidates who have criticized ethanol subsidies there is also a silver lining: The issue might not have the full political force it once did, when opposition was equated with political suicide. After Jon Huntsman, a former Utah governor, announced in June that he would not compete in Iowa, saying his ethanol opposition meant he could never do well there, a survey by Iowa pollster Ann Selzer suggested he might have given up too soon.

Only 14 percent of likely Republican and independent caucus voters, she found, described a candidate’s opposition to subsidies as a “deal-killer.” Three out of four said either that it would be “no real problem” or that it was something they would consider among other factors.

‘A dirty word’

Iowa’s economy is now centered more on health insurers, banks and other industries than corn, Selzer said. And many caucus voters have soured on government subsidies, which are seen as fiscally unsound, even those that benefit neighbors.

“Subsidies are a dirty word with a lot of conservative Republicans,” Selzer said. “It’s the politicians who don’t seem to understand the role of ethanol in Iowa.”

As the politics have changed, so, too, has the industry, up to a point. When former Minnesota Gov. Tim Pawlenty, then a candidate, announced his opposition to ethanol subsidies in May, he won plaudits for what was called a courageous stand. But industry officials say Pawlenty was not saying anything much different from an industry-backed compromise that had already been hashed out by one of ethanol’s most powerful supporters in Washington, Sen. Charles Grassley, R-Iowa.

One expert, C. Ford Runge, a professor of applied economics at the University of Minnesota, estimated that ethanol accounted for at least 25 percent of the rise in corn prices. In the current environment, the ethanol industry needs the mandate, if not the tax credit and tariff, he said.

“Without any of these supports,” Runge said, “the industry would die a rapid death.”

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