Remember all the special interest giveaways in the Inflation Reduction Act? While it was doubtful that legislation would ever reduce inflation, it was a cornucopia of subsidies and tax credits to green energy companies. The GOP plan to demand cuts in exchange for raising the debt ceiling originally included many of these tax credits, but the Republican corn lobby wanted to keep them.
From Semafor:
When Speaker Kevin McCarthy only has four votes of wiggle room in passing GOP legislation, the corn caucus can be as powerful as the Freedom Caucus. After a proposed repeal of biofuels subsidies prompted a rebellion by Midwestern lawmakers, leadership is making changes to a bill they presented as non-negotiable, according to Joseph Zeballos-Roig….
At about 2 a.m. Wednesday morning, Republican leaders filed amendments to their package aimed at winning over the holdouts. With the changes, the bill would no longer repeal some of the biofuels tax credits the corn-belt Republicans expressed concern over, and would allow companies that had already made business decisions based on the credits to claim two others.
Cronies of all parties, unite!
For a good piece on how the Renewable Fuel Standard (RFS) aimed at advancing a U.S. biofuel industry that turns out to be a distortive waste and an innovation killer, I recommend this piece by Arthur Wardle at our substack Farming Abundance. If you ever need evidence that you can’t get rid of bad policies and bad tax credits once they are in place, look no further.