Senator Charles Grassley, one of the six power brokers featured in the New York Times story today on the inner circle of senators who are shaping health care legislation, may not be one of the three Blue Dog Democrats on the group, but that doesn't stop the Iowa Republican from being pretty dogged when it comes to his own pet issues.

According to today's Congress Daily, the Finance Committee's ranking member has slammed the brakes on the confirmation of Thomas Shannon to be ambassador to Brazil. His reason? He seeks what is euphemistically called a "clarification" of Shannon's confirmation hearing statement that eliminating the tariff on ethanol imports would be "beneficial." Of course, by "clarification" the Senator means a complete reversal slammed down Shannon's gullet by administration higher ups.

In letters to Secretary Clinton and USTR Kirk Grassley wrote:

A clear signal of the President's stance on this issue would decrease the possibility of confusion in America's heartland and in Brazil regarding the ethanol tariff if Mr. Shannon were confirmed as Ambassador to that country."

Since Shannon, most recently U.S. assistant secretary of state for Western Hemisphere Affairs and by consensus the most talented and successful individual to hold that office in at least two decades, is one of America's very best diplomats he will of course, be far too circumspect to offer Grassley the "clarification" he deserves.

Let me try however. U.S. ethanol tariffs are indefensible on any level, yet another example of the system of agricultural welfare that has burgeoned in the United States thanks to that good old fashioned combination of backroom and checkbook politics that make America great. There is not a single credible analyst of biofuels (which is to say one that is not paid for by or affiliated with American agriculture) who thinks that corn ethanol makes a hint of sense. It is hopelessly inefficient and with every new development regarding next generation biofuels only grows more so. Brazilian sugar cane ethanol, the main target of the tariffs, is produced as much as eight times more efficiently. As such, it offers a cheaper, more abundant, more environmentally friendly alternative to American consumers at a time when one would have thought that concerns about reducing dependence on foreign oil and combating climate change would be at the forefront of our concerns.

But once again, America's electoral system rears its ugly head. So long as presidential campaigns begin in Iowa, Iowans like Grassley will use the system to put the interest of their state's three million citizens and the most vocal special interests within their midst like the corn lobby, ahead of the three hundred million or so of the rest of us. Further, in so doing, Grassley seeks to preserve yet another dimension of America's system of farm protection and subsidies that costs tax payers tens of billions each year, forces food prices higher (according to the likes of Nobel Prize winner Joe Stiglitz) and is the single biggest distortionary factor in the world trading system. I understand why he is doing it. It's just a shame he can. The system allowing individual senators to hold up presidential nominations is regularly abused and needs to be reconsidered.

It is now July and the Obama administration does not have its own ambassador in Brasilia, capital of one the rising powers that is most important to us in the world. The guy who is there now, Bush's appointee Cliff Sobel, is widely regarded by Brazilians (and anyone else who is paying attention) as a joke whereas Shannon is seen as the crème de la crème of the U.S. diplomatic service and is a nominee viewed with great enthusiasm by the Lula administration. The Shannon pick said "Brazil is important."  Grassley's move says "all politics is local." 

It will be interesting to see how this plays out given that Grassley is so important to the prospects for health care reform. Grassley, who is as canny as they come in the Senate, knows the hand he holds and is betting he can get the Obama team to commit to keeping the tariffs as part of the wheeling and dealing associated with health care. I wouldn't bet against him.

As they say around state fair time in Des Moines, "ain't nothing like a corn dog."

Chip Somodevilla/Getty Images

 

BLUE13326

11:48 PM ET

July 28, 2009

I actually find a senator

I actually find a senator doing his best to stand up for his state's parochial interests far less distressing than the new chic of Congressmen openly telling us they can't be bothered to read these 1000-page bills they have to vote on, and even if they did, they wouldn't understand them without their lawyers present; which very much has a fall of Rome/end of Republic feel about it.

And speaking of the end of the republic, it's pretty funny how now that your guy's in the White House this whole Congressional checks and balances concept seems too cumbersome to be bothered with, and who really cares about the imperial presidency now; let's just declare him Obama Caesar and have done with all these silly checks on presidential power. Those concerns were so 2008, after all...

 

ZATHRAS

4:17 AM ET

July 29, 2009

Overtaken by Events?

Laura Rozen reports this afternoon that Shannon's nomination was reported out of Senate Foreign Relations today.

This doesn't mean Sen. Grassley can't block a vote on the Senate floor, but it does make it harder. Moreover it's not clear that Grassley is the one with leverage on the health care reform bill. The Obama admininstration will pay a price for his vote if there is a chance he will break with his fellow Republicans and vote yes. Is there a chance he would do this, for a bill that came close enough to what Obama campaigned on for the administration to support it? If the answer is "no," Grassley has nothing to trade. The administration couldn't get rid of the ethanol tariff on its own anyway.

Grassley is making a good show for the crowd, a skill he has practiced over many years, but he's bluffing here. Obama should call.

On a related subject, is Rothkopf sure that ethanol made from Brazilian sugar cane is really better for the environment than ethanol made from Iowa corn? It's true that it's cheaper (by far) to make ethanol from sugar cane, but Iowa corn farmers don't have to rip up the Amazon rain forest to grow their crop, or plant new acres every year because the crop they grow exhausts the soil. Ethanol tariffs go down, demand for sugar cane grows up, so acreage planted to sugar cane in Brazil goes up, too. Where? Depends on how high prices go, but it's a fair bet that much new cane acreage would be in Amazonas.

 

DJROTHKOPF

11:16 AM ET

July 29, 2009

Coupla things...

This was written as the story came across the wires so of course, it may be overtaken by events...and I'll update if I have more info. As for Grassley's vote...see the Times story. As for whether I am sure about Brazilian ethanol, I am. Brazil can double or triple its output of ethanol only by using existing farmlands and farmable pasturelands and not getting anywhere near the Amazon. Further, sustainable farming techniques in Brazil have made enormous strides regarding efficient land use and there is a great commitment to sustainability on major new ethanol projects in Brazil. Further, of course, corn is food and should be used for food and there is no way demand for biofuels can be met using corn as a feedstock. Ultimately, my money is on next generation biofuels, cellulosic production using feedstocks like elephant grass or on algae or on using bio feedstocks to produce products other than ethanol that have greater energy content and other properties more like current liquid fuels (butanol, for example).

 

BOB JACOBSON

4:19 PM ET

July 30, 2009

An overconfident economic triumvirate

Your report describes this happy trio briefing the President full of peppy confidence, with an assured posture.

Perhaps. More likely, their attitude is, as Malcolm Gladwell writes in the current New Yorker, an expression of "cocksuredness." Simply being in the financial milieu for a long enough time and then holding office during six months of relative comfort in the Beltway has bred false confidence.

Bernanke, Summers, and Geithner saved the banks. Or rather, padded their accounts. Meanwhile, the rest of the economy is in tatters. In my neighborhood, people finally have started to feel the burn and they are very unhappy.

The President is ill advised to maintain the status quo. However, so far, he seems unprepared to make changes in personnel. I fear for 2010.

 

David Rothkopf is the CEO and Editor-at-Large of Foreign Policy. His new book, "Power, Inc.: The Epic Rivalry Between Big Business and Government and the Reckoning that Lies Ahead" is due out from Farrar, Straus & Giroux on March 1.

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