Energy | September 29, 2008 |
House Fully Funds Renewable Energy Act, Possibly Sinking It
This afternoon, the House with its large majority of Democrats easily passed H.R. 7060, the Renewable Energy and Job Creation Tax Act of 2008, that had passed the Senate last week as The Renewable Energy and Extension Act of 2008.
Yippee ! right? Sadly, no.
No, now it goes back to the Senate again with a small change. Because the House fully funded it under return to Pay-as-you-go rules that Pelosi demanded the House adhere to at the beginning of the Democrats taking the House majority in 2007.
It is one thing to be so high minded in the House, where support for clean energy rules. But the Senate has enough Republicans to prevent passage. There are never enough votes to get clean energy past the 60 vote Republican filibuster otherwise with an almost evenly split 51/49 Senate.
And as each part must be agreed to, this fiscal decency on Pelosi's part could sink the bill back in the Senate. To say nothing of a Bush veto. He has repeatedly said he would veto any energy bill funded by taxes on oil profits.
Without the veto-proof vote of last weeks Senate version 93-2, Bush would have veto power again over the bill. The Senate version had cleverly bypassed the filibuster by wrapping the bill together with disaster relief for disaster victims of Hurricane Ike, who are predominantly the constituents of Republican Senators in the South, and the AMT fix, making it almost impossible to fail passage.
But the House separated these out into a separate bills, a fatal move. It also stripped the bill of concessions on high carbon energy provisions, again, needed to secure passage in the Senate, and that could have been easily overturned in later legislation on carbon emissions under a new administration.
“We are in peril if the House does not take up and pass this legislation (as is),” Cantwell (D) said: "that Senate bill was massaged as much as it can be.”
Quoting Nancy Pelosi's office press release this afternoon, these differences included:
"This bill offers the Senate a chance to support a two year extension of tax relief to create jobs and strengthen the American economy, paid for by offsets Senators have already supported in other legislation.
Unlike the Senate’s proposal, it is does not add to the national debt -- using provisions that passed the Senate on Tuesday by a vote of 93 to 2 and another already passed by the Senate and signed into law by the President to fully offset the cost of extending this critical tax relief.
The offsets close loopholes allowing corporations and executives to avoid U.S. taxes by shipping jobs and investment overseas, curtail unnecessary tax subsidies for big, multinational oil and gas companies, and provide for broker reporting of customer’s basis in securities.
It is time for Senate Republicans to join us in extending important energy, business and individual tax incentives in a fiscally responsible way that does not require America to borrow additional tens of billions of dollars from foreign countries. Now more than ever, it is critical that we do not continue to add unnecessarily to the national debt, which has surged to nearly $10 trillion due to the fiscal irresponsibility of the Bush Administration and Congressional Republicans.
Tax Incentives for Renewable Energy to Spur Green Jobs and American Energy Independence ($15 billion; similar to Senate)
- Eight-year extension of the investment tax credit (ITC) for solar energy.
- Multi-year extension of the production tax credit (PTC) for energy derived from biomass, geothermal, hydropower, waves and tides, landfill gas and solid waste (through September 30, 2011).
- One-year extension of the PTC for energy derived from wind.
- Incentives for carbon capture and sequestration demonstration projects.
- Incentives for the production of homegrown renewable fuels, such as biodiesel and renewable diesel, and for the installation of E-85 pumps for consumers to fill up flex-fuel vehicles.
- Tax credits of $3,000 or more toward the purchase of fuel-efficient, plug-in hybrid vehicles.
- Incentives for energy conservation in commercial buildings, residential structures, and energy efficient appliances."
The renewable energy provisions themselves are unchanged. (The EV credits still do go up to $5,000.) So now the ball is back in the Senate court.
Possibly Pelosi and Reid are playing a clever game of chicken that they know they can win. After all, back when this bill was the Baucus amendment in December, and fully funded, just like Pelosi's version today, and not tied to disaster relief or the AMT, it did get 59 votes - only 1 vote short -- McCain did not vote, securing failure for the Energy Bill of 2007.
Related stories:
On Ninth Attempt, Democrats Pass Clean Energy Provisions
McCain's 50 Votes Against Clean Energy
How Obama Has Voted On Clean Energy
Graph from opensecrets.org
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Comments By Readers
I enjoyed your insight regarding the current status of the Renewable Energy Act, a piece of legislation that I find important to the support and advancement of the renewable energy industry. I agree with you that the amendment by the House may indeed cripple successful passing of the bill. As you intimated, it was a shrewd move by the Senate to combine the bill with aid for disaster victims affected by Hurricane Ike. Pragmatic decisions such as these provide for successful legislation. I feel that this was a diplomatic move emphasizing compromise, not a subversive tactic meant to strong-arm renewable energy legislation into being passed. However, members of the House evidently did not perceive it this way, as they extracted the two provisions into two separate bills. I believe that this was an unwise move, for packaging the funding this way would be a way in which both taxpayers could benefit from the Renewable Energy Act and citizens affected by the hurricane could receive aid.
Yet as you intimated, ultimately the struggle over passing the Renewable Energy Act may be irrelevant, as it is ultimately contingent on President Bush signing the bill into action. As you stated, he is not in favor of the Senate's request to fund the bill in a manner that would impact oil companies. I think that this is a travesty, considering that the bill only lessens subsidies for oil companies involved in overseas investment. This does not mean these companies would be taxed; rather, they simply would not benefit as much from their interests in foreign ventures. I feel that this is a small price to pay for the advancement and support of a growing renewable energy industry. In fact, to ensure long-term viability, energy companies heavily involved in oil should be looking to invest in renewable technologies as oil market instability continues and supply reportedly shrinks.
Failure to pass this bill would result in the expiration of Investment Tax Credits (ITCs), which provide incentive for investment in technologies such as solar, arguably the most successful renewable energy developed so far. If these were to expire, progress in this industry would be stifled. Many companies, including GE, have stated that their continued operations are largely contingent on the 8-year extension of ITCs provided by the Renewable Energy Act. These companies would then have to seek out other sources of funding, a gloomy prospect given our nation's current financial situation. Thus, government funding in the form of the Renewable Energy Act appears to be the most economically viable solution for the continued development of renewable energy industries- industries which possess tremendous growth potential and are thus vital to our nation's troubled economy.
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