Taxpayer Subsidized Green Energy Survives Despite Failures
Albert Einstein described insanity as “doing the same thing over and over again and expecting different results.” President Obama should take note. The Daily Caller recently had a story detailing how Obama’s budget makes the case to permanently extend carve outs and favoritism for the green energy industry. Specifically, the White House’s 2014 budget calls for “$23 billion for incentives for renewable energy production and energy efficiency programs over the next decade. An additional $2.5 billion in tax credits would be given to companies that invest in advanced energy manufacturing projects, such as facilities for green energy manufacturing — bringing the total amount of clean manufacturing tax credits to $4.8 billion when combined with credits from the stimulus package.”
Thankfully presidential budgets really have no teeth to them – in that they don’t have the power to control the appropriation of funds – but they do offer great insights and an indication of what the president’s priorities are and where he’s allocating his political capital. While the White House’s budget plan calls for future action in 2014, we don’t need a crystal ball to know what will come of these misguided policy proposals. For example, the idea of increasing funds for advanced manufacturing projects is a particularly ludicrous one. Just yesterday (April 24) a subcommittee of the House Oversight and Government Reform Committee held a hearing to take a closer look at all that’s going wrong with Fisker Automotive, a recipient of a $529 Advanced Technology Vehicles Manufacturing loan program. Even a The New York Times acknowledged what a mess the Fisker fiasco is by noting that “No electric vehicle initiative backed by Washington seems more of a debacle than Fisker.”
While Fisker is the most recent case of a company failing despite a significant infusion of your tax dollars, this problem is not a new one. As The Heritage Foundation recently explained in a blog, “Ever since Solyndra became a household name, taxpayers have become acutely aware of the government’s bad bets, which have taken quite a toll on taxpayers’ wallets. In fact, according to Heritage’s calculations, the government has backed 20 now-bankrupt green energy companies, and in doing so has placed over 2.6 billion taxpayer dollars at risk.”
With the funding objectives that Obama’s budget outlines, we can expect to see many more wasted taxpayer dollars on green energy projects. Another example of how the federal government has poorly spent your hard-earned money is on the recently extended wind production tax credit (PTC). It’s not just the president that fails to acknowledge the writing on the wall; in fact, Congress was the branch that voted to extend the wind PTC for another year. And don’t be fooled, although it was only extended for a year, this poor policy move will cost taxpayers a pretty penny. According to the Daily Caller, “The Joint Committee on Taxation reported that a one-year extension of this tax subsidy alone would cost taxpayers $12.1 billion.”
What all these pipe-dream green energy examples share is the idea that the government can better determine the allocation of resources than the private sector. To put it bluntly, the problem with this approach is that it flat-out doesn’t work. That’s because the government doesn’t care about turning a profit and has nothing, other than your tax dollars, to lose if the experiment fails.
Of all the dumb ideas coming out of Washington these days, the idea of forever financing green energy programs, which result in a significant fleecing of taxpayers, has to rank among the worst ones. Congress should not heed the funding plans Obama proposes in his budget, especially considering the fact that the federal energy tax subsidies that are already on the books will likely cost more than $16 billion in 2013 alone. And that’s $16 billion too much for our nation’s taxpayers. Instead, Congress should spend its time focusing on solutions to protect American taxpayers and advance transparency in the federal government, especially when talking about the way and to whom the government disburses our money.