The Hill News

GOP presidential candidate Tim Pawlenty said Monday he wants to phase out federal ethanol subsidies, which are considered a sacred cow in Iowa.

In formally launching his campaign for the White House, Pawlenty, the former governor of Minnesota, said the subsidies need to be gradually eliminated as part of an effort to reduce the federal budget deficit.

{mosads}"We need to cut spending, and we need to cut it … big time. The hard truth is that there are no longer any sacred programs," he said during a town-hall event in Des Moines, Iowa. "The truth about federal energy subsidies, including federal subsidies for ethanol, is that they have to be phased out.

"We need to do it gradually. We need to do it fairly. But we need to do it."

Pawlenty's announcement is significant since it is certain to raise eyebrows in Iowa, where he is looking to make a strong showing in the first-in-the-nation caucuses to jumpstart his campaign. 

Supporting ethanol subsidies has long been key to winning support in Iowa, but Tea Party activists demanding large spending cuts are ramping up pressure to end the support in 2012.

As governor of a Midwestern, agricultural state, Pawlenty has previously supported the subsidies. But he told the crowd that he reduced his state's subsidy to the ethanol industry when fiscal times got tough.

"I fully understand and respect the critical role farming pla! ys in our economy and our society. I've strongly supported ethanol in various ways over the years, and I still believe in the promise of renewable fuels â€" both for our economy and our national security," he said. "But even in Minnesota, when faced with fiscal challenges, we reduced ethanol subsidies. That's where we are now in Washington, but on a much, much larger scale."

Pawlenty also indicated that he supports reducing or eliminating government subsidies "across all sources of energy and all industries, including ethanol. We simply can't afford them anymore."