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Senator Kay Bailey Hutchison on the Ethanol Debacle

BEGIN TRANSCRIPT

RUSH: I'm really excited to have with us for a couple minutes here, Senator Kay Bailey Hutchison from Texas, and I wish to speak to her about this ethanol problem because she's really on the case and has written an op-ed piece in Investor's Business Daily about this. Senator Hutchinson, welcome to the program. It's always nice to have you here and talk to you.

SEN. HUTCHISON: It is great to be with you, Rush. We are listeners in our family. We think you have done a great job for kind of changing the thought processes of America.

RUSH: I appreciate that.

SEN. HUTCHISON: It's great to talk to you.

RUSH: What's going on with this? Where are we headed with this? Why is it that you are one of the few voices in the elected government that's trying to stop the growth of ethanol, given the problems apparently related to it?

SEN. HUTCHISON: Well, of course there are many interests that don't want to stop this ethanol mandate; and I think that the time has come for us to really, Rush, look at the things that we can do that might bring the cost of fuel and the cost of food and gasoline at the pump down. We can't do a lot, but one of the few things we could do is put a freeze on this ethanol mandate and just let's take a pause and not have this kind of requirement where we are on the one side subsidizing this product, but on the other side the price is so high that it's causing really a ripple effect throughout our food industry.

RUSH: And around the world.

SEN. HUTCHISON: Yes.

RUSH: I mean, even Prime Minister Brown is suggesting something similar to your idea, that it's just gotten out of hand. It's just typical. I'm sure people behind this, at some point -- I'll be gracious -- had good intentions, but the unintended consequences of this make it clearly a boondoggle. But there's some politics involved here. I remember talking about this, Senator, not long ago on the program; and I was besieged with phone calls from people in Iowa who said, "Rush, don't you know who votes for Republicans out here?" meaning agricultural people and this sort of thing. So that's a factor in this, too. Do you feel like you're taking any kind of a risk by proposing this?

SEN. HUTCHISON: Well, yes. I mean, they're in a different system, and they're used to it, and we have to understand everybody's problems. But right now the price of corn is so high, farmers are doing great; and we don't need a mandate. The price will stay high, but it will just come down some, and it will also -- I mean, yeah, I think the market can work here. I think that farmers will continue to do well. But the emphasis on corn is now crowding out people who used to plant wheat. The emphasis on ethanol is also affecting soy and maize and palm oil. It's having unintended consequences. I think when we do something in Congress and it has an unintended consequence, our responsibility is to assess the situation. We're on the brink of recession. We're not technically there yet, thank goodness, but we need to assess where we can make a difference, and this is one area that would be relatively easy.

RUSH: Well, to us out here, it seems like a no-brainer. There are problems related with it. It's not the sole reason why transportation costs are up and fuel prices are up and food prices and scarcity are happening, but it's a contributing reason. Those of us out here who, you know, we don't understand the day-to-day workings of what goes on in these bodies such as the House and the Senate; it looks to us like it's not working. Stop it. It just isn't working. We've tried it. The intentions might have been honorable, but it isn't working, so we move on. But if we're not going to do that, it's going to keep wreaking this damage -- and you're right, it has ripple and residual, ancillary effects throughout the culture.

SEN. HUTCHISON: I met with a group of people who process chickens -- Pilgrim's Pride, Anderson Farms, Tyson -- and they are shutting down parts of their plants, their operations. They are all going to report drastically reduced, not just profits, I mean losses. They're going to have big losses at the end of this month. And they're just saying, they have got to have some relief. I sympathize with them. They're putting the food on the table for us, and I've talked to cattle producers. I've talked to pig producers. They are all saying the same thing: The cost of food and the cost of fuel, is just killing their ability to continue to operate. So I think it's going to get worse, and I'd like to try to do something that might mitigate this and not cause the crisis.

RUSH: But this is just one element. I know the agriculture community likes this. It's something very profitable for them. But at the root of this you find liberalism. You find the environmental movement. This is all part of global warming; this is all part of reducing carbon emissions, reducing dependence on oil and so forth; and none of that is possible. Yet we go down this road because people want their lives to have meaning, and so they buy ethanol thinking they're saving the planet and so forth. It's a devious scheme that we're up against. This food price, this is serious, Senator. I remember the first time I learned when I was a young boy that the profit margin in grocery stores, on food -- not the ancillary things they sell, but the profit margin on food -- was one to one and a half percent. I asked my dad, "How can they survive?" He said, "Son, people have to eat. Food is not a commodity. It's not something that you can mess around with price-wise like you can other things, like electronics or televisions or whatever."

SEN. HUTCHISON: Right.

RUSH: Everybody has to eat. So it has to be affordable for people from all economic ranges, and it's not now. I mean people are reorienting the way they live based on the price of gasoline, and the price of milk and rice and so forth. This is going to have devastating consequences if the problems here that cause this are not really addressed, and that's why I hope you succeed. Your column is very courageous.

SEN. HUTCHISON: Well, thank you very much. I appreciate it. I have gotten the same kinds of calls that you have, but it's just, something that we've got to say, "Look, we did have good intentions, but now we have a lot of other alternative fuels." What we need to do is drill for our own natural resources.

RUSH: Amen!

SEN. HUTCHISON: We need to go into ANWR.

RUSH: Amen.

SEN. HUTCHISON: We need to go into the Outer Continental Shelf where we have our own resources that can help us through this. We need to continue to do research into other forms of renewable energy. Besides solar and wind energy, we can also use waves and currents in the Gulf of Mexico and the Atlantic and Pacific. We've got so many alternatives that we need to pursue. We need more nuclear power plants. We need more refineries. These are things that honestly, Rush, the Democrats are stopping in Congress. Every time we put forward something that could really make a difference, the Democrats are stopping it.

RUSH: Why do you think that is, Senator?

SEN. HUTCHISON: Well, I think they wrongly believe that it's going to hurt the environment to drill in ANWR.

RUSH: Yeah.

SEN. HUTCHISON: ANWR is an area the size of the state of South Carolina. The part that would be drilled is an area the size of JFK airport or Washington National Airport or Dallas Love Field. It's an area the size of an airport that would be drilled because the new technology allows us to drill underground for just hundreds of yards and you don't have to have a lot of wells to drill anymore. But they're not acknowledging that. The people of Alaska want this. They have had referenda. They want the jobs, they want the economic security, and they know it won't hurt the environment. Yet we cannot get a bill through Congress that would allow drilling in that small part of ANWR. These are the kinds of things that just don't make sense when the price of gasoline is so high.

RUSH: Ah, sadly, they do make sense if you understand Democrats. I know you do. We're talking, by the way, with Senator Kay Bailey Hutchison from Texas. Now, yesterday the president made a presentation on energy and said much of the same thing you just said here; and Senator Schumer from New York went out and responded to it and said, "If we started drilling in ANWR today we wouldn't have a drop of oil for ten years." Well, of course, Bill Clinton vetoed the first time this came up in 1994. We could have been at this four years according to his ten-year plan. He also said something that mathematically doesn't make sense. He said that this million barrels a day that ANWR would produce would reduce the price of gasoline or oil -- I forget which one he specified -- by a penny. Well, that's absurd, because when the price of oil... When we lose a million barrels in the supply, does the price only go up a penny? They're using scare tactics, here. We need resources. We need our oil, and you got Schumer out there saying, "No, it wouldn't matter," and they're misleading people thinking that there's a substitute for it right around the corner when there's not.

SEN. HUTCHISON: You're right. When President Clinton vetoed ANWR, we would have been producing. But I totally disagree and reject the argument that it would be ten years. We could start drilling in ANWR, and I think within a couple of years you would start seeing the results. But more important, if we were drilling there and people in the market, in OPEC -- if the people who are hedging in the market for futures in this oil industry. If we were drilling in ANWR -- do you think the price would stay up? No. People would know that there would be an availability. They would know that there was going to be a real difference in what we could produce. The one million barrels a day is the amount we import from Saudi Arabia every day. That's what we would be getting from our own resources and control it; and that doesn't count what we could do if we were drilling off the Atlantic and the Pacific, in environmental safe ways. That's the key. If we took control of our own destiny, we could become energy independent and self-sufficient and not depend on places that don't like us very much like Venezuela.

RUSH: All this makes so much sense that we out here don't understand why it isn't done. We understand the politics of liberalism and the Democrats trying to create as much chaos as they can for reelection purposes in November, but they consistently oppose this kind of independence; despite the fact they're the ones claiming and whining and moaning how dependent we are. But they're the ones that always stand in the way of becoming energy independent, and there has to be more to it than just their own desire for electability. I think it's a little bit more hideous than that. I know you wouldn't want to comment on that. But this is really serious stuff to all of us. The price of everything going up all based on the price of oil and energy. It's all related. There's an ideological group out there, the environmentalists, who are get... They're the only ones that are happy with this. They're getting everything they want out of this. Of course, the people they donate to and vote for are thus happy about it, too; and the country, in the meantime, suffers.

SEN. HUTCHISON: Well, Rush, if we would do this -- if the Democrats and if the people understand this issue enough to force them. If we could open refineries, make it easier to do so; open nuclear power plants, which is the cleanest form of energy at the best, most efficient prices that we could possibly produce it; and drill in ANWR, the Outer Continental Shelf and deep drilling in the Gulf Coast, we could be a country that doesn't have to rely on anyone else. I think we need to make this an issue in this election.

RUSH: I couldn't agree more.

SEN. HUTCHISON: Don't let the Democrats get by with saying, "Oh, it's just terrible that the price of gasoline is high, and it's the president's fault." It is not the president's fault. It's the Democrats in Congress who continue to keep us from drilling in ANWR. We had almost enough, 60 votes, to pass that last time. We were one vote short, couldn't get it, and so here we are again.

RUSH: Quick question, last one. I know you have to go. Senator Obama's running a campaign on "unity" and solving these kind of problems. Could he bring people together on this, Senator, to renew our effort to become energy independent?

SEN. HUTCHISON: Well, I haven't seen any ideas yet from the Democrats that would actually make a difference in our energy independence. That's the key. It's walking the walk as well as talking the talk. We've got to have real action which could be done right now in Congress today. The Democrats are in control of both houses, and yet we can't even get free trade agreements with Colombia much less an open trade --

RUSH: Oh, that's dead, and that's just to protect the unions.

SEN. HUTCHISON: Well, it's just wrong. We've got to have action, and we could make a difference in our energy independence -- and we could certainly make a difference in price, because I think the price of oil would start falling when the other countries that produce oil see that we are taking our destiny in our control. I cannot leave before I say that I listen to you on WBAP when we're home in Dallas. So I hope that you keep running there so that all these messages get out.

RUSH: Thank you, Senator, very much. I appreciate that. It's nice to get so much time with you today. We really appreciate it.

SEN. HUTCHISON: Thank you, Rush. It's great to be with you.

RUSH: Same here. Senator Kay Bailey Hutchison of Texas.

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