Democrats Fight to Extend the Green Stimulus from The Recovery Act in the Tax Hostage Drama

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Republicans are demanding that President Obama take the extension of renewable tax credits off the table in the deal they negotiated in return for bonus tax cuts for the rich, according to Politico.

But Democrats are fighting to allow an up or down vote on an extension of the Recovery Act green stimulus provisions that are about to expire. The extension, Baucus Amendment 4727, already got 53 votes on Saturday’s failed vote to extend Bush era tax cuts on just the first $250,000 of income,  indicating that without a Republican filibuster, the measure would pass.

Two green stimulus provisions in particular, are endangered. (Ethanol extensions have Republican support.)

The two expiring provisions are:

Green energy R&D manufacturing tax credits which are used to begin the conversion of rust belt factories to wind turbine production or the development of new more energy efficient technologies, and the Section 1603 cash grants for solar and wind which are fueling an unprecedented amount of new solar and wind projects.

“These are some of the biggest potential job producers in the country,”  California’s Senator Feinstein told Politico. “And it’s dependent on these Treasury grant programs for the most part.”

Republicans prevented an up or down vote in the tax vote last weekend in their familiar blocking tactic (the filibuster), because the tax cuts were only on the first $250,000 of income in the tax bill.

But it appears that there’s more than wealthy taxpayers’ rights that matters to the Republican Senators. They want the expiring renewable energy tax cuts taken out of the bill.

As renewable energy is becoming more competitive, partly as a result of the Recovery Act investments, clean energy policy is being fought hard by the fossil-fuel subsidies lobby and their proxies in the GOP.

There is a need for both the renewable energy provisions to be extended some time to take effect, and they are not costly to the general treasury.

So far, as of November 2010, only $11 billion of the green stimulus money has actually been cashed, according to publicly available data at

Partly, this is because much of the Recovery Act green energy stimulus has been in the form of  loan guarantees that then prompted the private sector to step up and invest in green companies. A loan guarantee is not cash out the door. The taxpayer is out relatively little actual money because of the way the green stimulus was designed. Incentives like tax credits that won’t be counted till next tax year.

But part of the problem is also due to the unprecedented nature of the green energy push. State-level bureaucrats responsible for approving new renewable infrastructure have been overwhelmed by the sheer number and size of the new large scale renewable energy projects that must be approved by the deadline of the end of this month.

As a result, many solar and wind companies have not yet got final approvals from officials to build the new renewable energy infrastructure, which takes 18 months or more to pass environmental reviews. There’s no Haliburton Exemptions for solar or wind!

It is clear that it takes a little more time than a year and a half to completely revamp the US energy infrastructure to prepare for the new clean energy economy of the 21st century.

Image: Orange Juice Blog
Susan Kraemer@Twitter

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