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POLITICS

Can McDonald's and Denny’s kill the ethanol mandate?

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Politics,Beltway Confidential,Timothy P. Carney

There’s plenty I don’t like about the lobbying agenda of the National Council of Chain Restaurants. NCCR — which represents the likes of Dunkin' Donuts, Wendy’s, McDonald's, Cracker Barrel and Denny’s — was among the food giants supporting the Food Safety Modernization Act, and it lobbied to restrict commodity speculation and for stricter price controls on what banks could charge retailers for processing debit card payments.

But these days, the chains are lobbying for free markets. NCCR is supporting legislation to roll back the federal mandate requiring refineries to buy ethanol. This is important. Here’s why.

Most subsidies have concentrated benefits and diffuse costs. You and I each pay more for food, maybe for gas, thanks to the ethanol mandate. But saving the ethanol mandate is far more valuable to the ethanol lobby than killing it is to you and me.

But that’s where McDonald's comes in. Mickey D’s pays tens of millions a year in higher food prices thanks to the ethanol mandate. Get all those chain restaurants together and they pay a ton every year — $3.2 billion, NCCF claims. Bam. You’ve got a concentrated loser of the mandate who can counterbalance the concentrated winner.

It’s like the mutual funds killing the Transaction Account Guarantee subsidy, natural-gas consuming corporations like Koch Industries blocking T. Boone Pickens’ push for natural-gas-car subsidies, or Delta lobbying to kill the Export-Import Bank.

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