CAFE Standard Profiteering

Timothy Carney, writing in the Examiner, on the corporations and lobbyists who are profiteering from Corporate Average Fuel Economy (CAFE) Standards, and how much money some of their PACs give to House and Senate candidates:

While ratcheting up CAFE won’t result in miraculously more fuel-efficient cars, it also won’t drive automakers out of business. Instead, it will likely drive them toward the loophole in CAFE — the renewable fuel credit.

To have any chance of meeting the 35-mpg average, carmakers will need to start selling flex-fuel cars that have inflated mpg ratings for CAFE purposes. This will spur consumption of ethanol.

While raising the CAFE requirements would be a stick in the eye of the Big Three (whose political action committees [PACs] in 2006 gave about $1.3 million to federal candidates), it would clearly be a gift to the ethanol industry, whose strong connections to lawmakers are legendary. Ethanol, an alcohol fuel made from grain, usually corn, benefits from special tax breaks, protective tariffs, and federal and state handouts, as well as government mandates.

In the 2006 election cycle, the PAC for Archer Daniels Midland (ADM), the nation’s top ethanol maker, gave $120,000 to federal candidates while fellow agribusiness giant Cargill, No. 2 in ethanol, gave $223,000 to House and Senate candidates.

Also pulling for ethanol — and thus benefiting from stricter CAFE standards — is Goldman Sachs, the Wall Street investment firm that has invested $30 million in a Canadian ethanol maker.

Silicon Valley billionaire Vinod Khosla, who recently penned a New York Times op-ed along with former Senate Majority Leader Tom Daschle, D-S.D., calling for even more ethanol mandates, is also heavily invested in ethanol…

Profiteering through the expansion of a regulation that kills a couple of thousand Americans per year can be described in one short phrase: Blood money.

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