Bennett Serves the Pork, Then Votes Against It
As House and Senate leaders confer about the final details of what will be President Obama’s $800-plus billion stimulus plan, both sides are seeking to cut a small increment of the huge outlays. One item that may or not be on the negotiators chopping block is a $500 million bauble that would go to an unsexy, largely unnoticed enterprise known as Title 17 or the Innovative Technology Loan Guarantee Program. Environmentalist fear the money will fund nuclear plants; budget hawks doubt the nuclear industry deserves federal largesse.
This fiscal pearl was first discovered in the tepid depths of the 700-plus page bill by environmental groups last week and handed over to the Washington Post’s Steve Mufson. “During its consideration of the stimulus package,” Mufson reported, “the Senate Appropriations Committee adopted an amendment from Sen. Robert F. Bennett (R-Utah) that was supported by some leading Democrats including Senate Energy and Natural Resources Committee Chairman Jeff Bingaman of New Mexico.”
The amendment was 93 words worth a half billion dollars. It added $500 million to an existing loan guarantee program established under the Energy Policy Act of 2005. The committee’s report on the bill did not specify that the money was for the nuclear industry but it did say that committee members were “aware of strong interest in the program and the large number of pending applications.”
This program covers a wide variety of energy projects, Mufson noted, “including ‘advanced nuclear’ power plants, plants that ‘gasify’ coal or turn it into liquid form, and plants that capture and bury carbon dioxide, a greenhouse gas produced by coal power plants.”
“Nuclear pork!” shrieked the green blogosphere.
Not so, said Bennett. As he explained to the Salt Lake Tribune, his measure was “not a bailout for the nuclear industry in any sense of the word. It is a method of attracting private capital into renewable energy. It is a more efficient way of attracting private capital” than what’s currently out there.”
While the loan guarantees could theoretically go to any energy sector, environmentalists counter, it is the nuclear industry that needs and wants them most. Those “pending applications,” note Dan Weiss and Alexandra Kougentaki of the Center for American Progress, come mostly from the nuclear industry which would not be able to spend the money any time soon.
“„“Investments in these facilities would create relatively few jobs over the coming years,” they write. “It would take at least three years for nuclear reactors to receive their licenses before any construction can begin. And there is already a backlog of $122 billion in loan guarantee requests for 21 reactors from the existing program. Congress authorized $38.5 billion in loan guarantees in 2007, yet the Government Accountability Office found that the Department of Energy has not even been able to manage that amount.”
What happens as House and Senate negotiators meet over the next few days to reconcile the House and Senate bills is anybody’s guess.
“There’s a lot of concern among members in House,” says Autumn Hanna of Taxpayers for Common Sense, one of the group’s seeking to block the Bennett amendment. “If you look at the past few years the House Appropriations Committee spending on this program has has always been much smaller than the Senate. But a swift conference could hurt the prospects of removing it.”
Supporters of the loan guarantee provision aren’t speaking out about it in public. Bingman touted the stimulus bill in a conference call with New Mexico reporters earlier this week and talked about how it will boost the budding solar sector in his state but he didn’t mention the energy sector loan guarantees as a reason why the public should support the bill.
As for Bennett, the canny conservative who put the idea into play at the time when the White House was fishing for GOP votes, well, he’s no longer supporting the stimulus bill. On Monday he voted against the bill that contained his own amendment, saying it would not “provide sufficient stimulus to justify the long term problems that it will create.” But he still supports his amendment according to his office, which says:
The self financed loan guarantee program would support “shovel ready” projects that provide an immediate economic benefit by creating tens of thousands of construction and manufacturing jobs. Congress has provided $42.5 billion for the existing program, which has attracted significant interest from all forms of electric generation, including renewables, clean coal, advanced fossil fuel technology, pollution control and nuclear power. The additional funding for the qualified technologies will go a long way in providing access to low cost capital on the scope and scale needed to transform our energy sector. Of the five solicitations, the Department of Energy has already received requests for over $123 billion in guarantees.
