Left, right agree: For big debt cut, end subsidies that harm environment

McClatchy NewspapersAugust 24, 2011 

WASHINGTON — Budget-slashers in Washington could get a jump-start toward their goal by eliminating environmentally harmful subsidies, an unusual coalition of conservative and liberal groups advised Wednesday.

The coalition agreed in a report that many programs Congress has been protecting for years should be eliminated, including subsidies for coal, oil and gas, the ethanol tax credit, farm subsidies and nuclear and solar loan guarantees.

These and other proposals in the groups' "Green Scissors" report would save $380 billion over five years. That's about a quarter of the $1.5 trillion Congress is required to cut over 10 years in the second round of debt reductions it agreed to earlier this month.

This is the 16th year of the Green Scissors report, but this time its total of recommended cuts is larger, and a sharply partisan Congress is under great pressure to find agreement on budget cuts. Also new is that one of the groups behind the report is the Heartland Institute, an anti-regulatory organization best known for its attacks on the work of the vast majority of the world's climate scientists.

Eli Lehrer of Heartland, one of the authors, said he hoped it showed "that well-meaning people, whether they're self-identified progressives or libertarians or conservatives, can get together and come up with common-sense, common-ground solutions to cut spending and save the environment."

Lehrer, who describes himself as a conservative Republican, specializes in insurance issues, not climate.

Ben Schreiber of Friends of the Earth, another author, said the report is a good starting point. The other groups that produced it are Taxpayers for Common Sense, a government waste watchdog, and Public Citizen, a consumer group.

"There's support across the political spectrum for these types of cuts," Schreiber said.

Some of those cuts include:

_ Subsidies for coal, gas and oil: Fossil fuel companies don't need taxpayer subsidies because they're highly profitable, the report argues.

Also for the chopping block, the report argues, is President Barack Obama's proposed "clean energy standard," which would mandate use of energy from renewable energy, nuclear, natural gas and "clean coal." The report says it locks the nation into forms of polluting energy and would raise prices.

_ Nuclear loan guarantees: The report says that the industry is mature and should be able to attract its own investment.

Schreiber said the entire loan guarantee program — including some funds for developing solar power — should be cut because it's poorly structured. The report didn't cover other renewable subsidies because they didn't fit in its category of subsidies that are environmentally harmful.

_ Biofuels subsides: Get rid of the ethanol tax credit and the Renewable Fuels Standard, which mandates increasing use of biofuels, because biofuels should be allowed to compete in the market without government help, it argues.

It also would cut billions of dollars in subsidies for advanced biofuels and for capturing carbon dioxide emissions from burning coal and storing them underground.

_ Farm subsidies: Cut subsidies for corn, wheat, cotton, soybeans and rice, including crop insurance. The report argues that many of these policies were created during the Great Depression, serve a few large farms and do little for the majority of farmers.

In addition, the report says, the subsidies "contribute to overproduction and cultivation of marginal lands, wasting taxpayer dollars and harming the environment."

_ Highways: The report projects that $72 billion over five years would be saved by ending general revenue contributions to the federal Highway Trust Fund. The gasoline tax is the major source of money for the fund, but more has been spent than the gas tax provides, so Congress has added funding. The report calls for eliminating some building projects and reducing others.

_ Mining, timber and livestock on public lands: Often these industries don't pay for the resources they remove or the roads and other infrastructure they need, the report says.

_ Water: Eliminate some Army Corps of Engineers projects, including a $1.3 billion lock in New Orleans, and phase out the National Flood Insurance Program because it "has sold millions of Americans coverage against flooding at rates not commensurate with their risk and far below those in the private market."

The report argues that the result has been to encourage more development in flood-prone, environmentally sensitive areas.

The congressional committee hasn't indicated yet what it will do in the next three months.

Paul Bledsoe, a senior adviser to the Bipartisan Policy Center, a Washington think tank, said his group wants the committee to reduce wasteful energy subsidies but believes that the biggest opportunity will be in a grand bargain on tax and budget reform.

Michael Franc of the conservative Heritage Foundation said there's a hunger in Washington for any potential common ground in an atmosphere of stark partisan divide.

"Any kind of initiative that pulls together people on the right and left over proposals that would save money has advantage over any other idea out there, and this certainly falls in that category," he said.

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Green Scissors report

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