June 6, 1997 Potomac Watch Guess Who's Trying To Save Corporate Welfare By PAUL A. GIGOT Let us now break this column's recent pattern and praise a Republican. He's Texan Bill Archer, who is taking a run at the federal government's worst case of corporate welfare. He has just one problem: Other Republicans, notably the speaker of the House. Mr. Archer wouldn't have sat in the minority for 24 years if he wasn't willing to tilt at windmills. But now that he's running the tax-writing Ways and Means Committee, his tilting matters. So this year he's aiming at ethanol, which is a fuel made from a mixture of corn and your tax dollars. He has enough votes to get the bill through his committee, and it could pass Congress if the GOP leadership gave it a push. The entire corporate welfare debate is a good test of whether the GOP's ultimate loyalties lie with business, or with taxpayers. The ethanol savings would be only a couple of billion dollars, but in today's Washington we have to be grateful for small favors. By shutting down this corn sluice, Republicans would show they can ox their own political gore. They'd also create more space for tax cuts that'd help more Americans, such as for capital gains. ? The political timing won't get any better. When Mr. Archer first tried this in late 1995, Bob Dole, self-described Senator Ethanol, hadn't yet retired. The presidential caucuses in Iowa, ethanol's Elysian fields, were three months away, not three years as they are now. Archer-Daniels-Midland Co., the political benefactor and ethanol beneficiary, hadn't yet pleaded guilty to price-fixing charges. Farm-state Republicans had more leverage over their leadership in 1995 because the GOP was trying to pass a budget with only GOP votes. Now in bipartisan mode, Republican leaders can pick up some Democrats to keep a majority. All of which puts the pressure squarely on Newt Gingrich, who has to decide if he again wants to rescue the ethanol subsidy at the House Rules Committee pass. That's what he did in 1995 after consulting Senator Ethanol. The speaker explained to some of us then that killing the subsidy was too politically risky while Republicans were trying to change so much of the rest of the government. But Republicans are now trying to change very little of the government, and Mr. Gingrich is still resisting. "I do not believe it is possible in this Congress to eliminate the ethanol tax break," the speaker told reporters this week. That's analysis masking incumbent protection. The speaker is fronting for members who don't want to cast any difficult votes this Congress. Those members include several ferocious Republican opponents of the welfare state, nonfarm version: Nebraska's Jon Christensen, erstwhile revolutionary; John Boehner, from the farm state of greater Cincinnati; Henry Hyde of the poverty-stricken Chicago suburbs; Michigan's Fred Upton, the renowned budget balancer; and Helen Chenoweth, Idaho's scourge of Big Government. Perhaps they were inspired to sign a letter embracing ethanol subsidies by another co-signer, the greatest class warrior in all of Congress, Michigan Democrat and man of the people, David Bonior. He's now earned the title of Congressman Ethanol. This crowd must have missed a recent General Accounting Office report, which found that the ethanol subsidy justifies none of its political boasts. It doesn't help air quality much, hardly reduces U.S. dependence on foreign oil and shovels much of its benefit to big ethanol producers. "Sixty-five percent of capacity is owned by the three largest firms, and the largest firm, Archer-Daniels-Midland, owns 50% of capacity," says the GAO study. Some things dubbed "corporate welfare" are arguably useful, but this isn't one of them. What's most notable, and depressing, about all of this is that it symbolizes the GOP Congress's change from reformers to incumbents. A majority Democratic coalition is naturally held together by its power to dispense government favors. But Republicans won their majority in 1994 running on ideas and reform. The danger for Republicans is that they are slowly evolving into a majority whose main rationale is keeping power. "That's what I fear more than anything," says Indiana Rep. David McIntosh, who voted against the budget deal for that reason. This may let Republicans keep their majority in 1998, but it hardly offers much reason to increase it, or much of an agenda. And sooner or later even House Democrats will figure out they can win back the House if they depict Republicans as the party of status quo government. All politicians claim to hate corporate welfare, but they vote for it when only the beneficiaries are watching. They could learn from T.J. Rodgers, the Silicon Valley entrepreneur, who has rounded up 61 fellow high-tech CEOs to say they support cutting corporate subsidies, even if it means giving up their own federal grants. Republicans are supposed to believe this too, as Bill Archer, to his credit, is reminding them. --from the Wall Street Urinal, used without permission, all rights ignored.