Fueling The Deficit

There are an awful lot of people in this country right now who seem to be supporting big government as the answer to this country’s problems. Many of the Democrats in Washington are, of course, fully on board that little train of thought. So they are proposing that the government should run health care, energy, education (more so than they already do) and just about anything else they can think of. They promise that they will run everything better than the private sector does.

But they cannot even get one relatively minor program to run properly and are on course to cost the taxpayers of this country up to $6 billion to pay the paper industry to do something the paper industry was already doing:

Back in 2005, Congress passed a highway bill. In its wisdom, it created a subsidy that gave some entities a 50-cents-a-gallon tax credit for blending “alternative” fuels with traditional fossil fuels. The law restricted which businesses could apply and limited the credit to use of fuel in motor vehicles.

Not long after, some members of Congress got to wondering if they couldn’t tweak this credit in a way that would benefit specific home-state industries. In 2007, Congress expanded the types of alternative fuels that counted for the credit, while also allowing “non-mobile” entities to apply. This meant that Alaskan fish-processing facilities, for instance, which run their boilers off fish oil, might now also claim the credit.

What Congress apparently didn’t consider was every other industry that might qualify. Turns out the paper industry has long used something called the “kraft” process to make paper. One byproduct is a sludge called “black liquor,” which the industry has used for decades to fuel its plants. Black liquor is cost-effective, makes plants nearly self-sufficient, and, most importantly (at least for this story), definitely falls under Congress’s definition of an “alternative fuel.”

All of which has allowed the paper industry to start collecting giant federal payments for doing nothing more than what it has done for decades. And in fairness, why not? If Congress is going to lard up the tax code with thousands of complex provisions designed to “encourage” behavior, it shouldn’t be surprised when those already practicing said behavior line up for their reward, too.

There’s more bad news, of course. There always is when Washington “helps:” The subsidies to the paper companies are causing other nations to call for trade sanctions. Just what a faltering American economy needs: a trade war.

Seriously, you really want these folks deciding what medical care you can have? You want these folks dictating carbon emissions? 

The Federal government is spending almost $2 for every $1 in tax revenue it takes in at the moment. The Democrats in Congress want to spend even more. If they can grossly mismanage one relatively small program, how much more damage will they do with their gigantic plans?

How long would you last if you ran your household budget this way, spend double your income? How long until all those bills came due?

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