Ethanol a dilemma for GOP field in Iowa

The GOP presidential field faces a huge challenge in handling ethanol subsidies in the Tea Party era ahead of Iowa’s first-in-the-nation 2012 caucuses.

Corn is king in Iowa, but ethanol is a close second, and Republicans seeking to unseat President Obama must balance conservative demands to slash subsidies with the popularity of price supports in Iowa.

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Support for ethanol subsidies has long been seen as a requirement to winning support in Iowa. Sen. John McCain (R-Ariz.), for example, shifted from opposing the subsidies in 2000 to supporting them by 2008, but still ended up losing to former Arkansas Gov. Mike Huckabee (R), partly because of his past opposition to farm subsidies.

The rise of the Tea Party movement is putting more pressure on Republicans to oppose ethanol subsidies in this campaign.

“It is an indication of your willingness to take on a lot of sacred cows,” said Matt Kibbe, president of the Tea Party-aligned Freedomworks. “So if you're not willing to take on ethanol, it raises the question of what else you're willing to take on.”

House Speaker John Boehner (R-Ohio) said in an interview with YouTube last week that he would consider ending farm and ethanol subsidies as part of congressional Republicans’ effort to reduce the deficit.

Rep. Ron Paul (R-Texas), a libertarian long-shot candidate who won the Conservative Political Action Conference’s (CPAC) straw poll earlier this year, also said he doesn't support subsidies.

“I don't think we should subsidize anybody or encourage certain things,” Paul said last week on CNBC. “We shouldn't interfere and say, ‘Grow corn and put it in ethanol.’ ”

Most of this year’s GOP field has a history of supporting ethanol.

Former House Speaker Newt Gingrich (Ga.) arguably has been the most vocal proponent, castigating “big-city attacks” on the ethanol industry in a January speech before the Iowa Renewable Fuels Summit.

Tim Pawlenty signed an increased ethanol mandate into law as governor of Minnesota, and lobbied for other states to do the same. He was the keynote speaker at the American Coalition for Ethanol conference in 2007.

Both Huckabee and former Massachusetts Gov. Mitt Romney voiced support for ethanol subsidies during the 2008 caucuses. And former Alaska Gov. Sarah Palin talked up supporting alternative energy, especially ethanol, as McCain's running mate in the 2008 general election.

Mississippi Gov. Haley Barbour has said that no cuts to farm subsidies can be considered off limits, but talked up his state’s ethanol production in his 2010 state of the state address. (His 2011 speech made no mention of ethanol.) Indiana Gov. Mitch Daniels has presided over increased ethanol production in his state, too, though he’s regarded as one of the most fiscally hawkish among possible GOP candidates.

Chuck Grassley, Iowa’s senior Republican senator, said he hasn't seen any of the White House contenders “badmouthing” ethanol yet. Grassley said he thought a candidate could win the Iowa caucuses even while opposing ethanol subsidies, as long as the candidate is consistent and also supports cutting price supports for other commodities.

“I think if someone sincerely comes in here and is intellectually honest and talking about being against subsidies for all energy, I think we're going to have to accept him,” Grassley said.

Some candidates have been willing to lash out at subsidies. Rep. Michele Bachmann (R-Minn.) also comes from a corn-heavy state, but she has called for a re-examination of ethanol subsidies. Former Sen. Rick Santorum (R-Pa.) often voted against ethanol supports during his time in Congress. Ambassador to China Jon Huntsman has no record of public comment on the issue.

As the campaign moves into a higher gear, candidates will be forced to sort out their views. Gingrich, Pawlenty, Santorum and long shots Herman Cain and former Louisiana Gov. Buddy Roemer will participate in a candidate forum on Monday night in Iowa, and similar events will become even more frequent — as will questions about their positions on ethanol.

For the Tea Party, that means an opportunity for redemption for the candidates.

McCain became a supporter in 2008, but Kibbe is hoping for movement in the opposite direction from some candidates in this cycle.

“I believe in redemption, and I'm willing to allow the entire presidential field to define itself,” Kibbe said. “I think that's what voters are looking for.”

Grassley’s comments, however, suggest that Republican candidates will also face pressure to toe the line on supporting ethanol.

“Let me suggest to you for the Tea Party people: One of the things I know these people really want for this country is for them to be safe for national security,” he said.

“I don't think there's anybody stupid enough to come here and say they want energy independence and tell them they don't want alternative energy to be a part of it,” Grassley added.