Whew! It’s good the Utah primary is over. Now Senator Hatch can relapse into his natural modus operandi.
As we’ve noted before, at the end of every calendar year, Congress passes a ‘tax extenders’ bill to temporarily reauthorize specific tax breaks that have not been permanently written into law. Some of these extenders include universal tax cuts such as, the AMT patch, the R&D business credits, and universal deductions for depreciation, as well as state and local taxes. However, they also include sundry green energy credits that are nothing more than refundable subsidies for special interest groups.
Today, the Senate Finance Committee, led by Max Baucus and Orrin Hatch, is marking up a bipartisan draft bill on tax extenders that is loaded up with green energy handouts. In fact, it contains every green energy wet dream under the sun and wind, including credits for green energy cars, homes, and biofuels. Most notably, Hatch gave in to the aggressive and officious Big Wind lobby and added in the Production Tax Credit extension. We’ve sounded the alarm against this venture socialism for over a year, but David Kreutzer of the Heritage Foundation says it best:
So far this year, the wholesale prices of electricity in the different U.S. markets average from less than three cents per kilowatt hour (kW-h) to about 4.5 cents per kW-h. The PTC provides a subsidy of 2.2 cents per kW-h to wind energy producers. So this PTC subsidy is equivalent to 50 percent to 70 percent of the wholesale price of electricity. (Note: It is the wholesale market into which the wind producers are selling their energy.) That’s a big subsidy.
Though you would not know it from wailing and gnashing of teeth over the expiration of the PTC, many states also have renewable energy standards that force ratepayers to buy wind, solar, and biomass produced electricity regardless of how much it costs. These renewable standards are separate from—and, for wind-power producers, in addition to—the PTC.
So not only will they enjoy a 50-70% subsidy of their production, they will continue to reap the benefits of state governments that use their power to force electricity providers to purchase their product. The Heritage Foundation also estimates that if the oil industry received a commensurate subsidy, they would get a $30 dollar check for every barrel produced.
Watching the committee markup on C-SPAN 3, you can barely discern the difference between the parties. Even Mitt Romney has spoken out against the green energy handouts, yet the Senate Republicans, particularly on a committee level, have blurred the distinction between the parties to the extent that Romney looks like Barry Goldwater.
It’s a shame, yet predictable, that Orrin Hatch would eschew his cathartic conversion to conservatism the day after he dispatched his primary opponent. His overarching selling point for giving him one more term was his promise to bring the glory back to conservatives as Chairman of the Finance Committee. Well, now we’re getting a taste of what to expect next year.
What we really need to do is pass Congressman Mike Pompeo’s (HR 3308) to sunset all targeted energy tax credits and grants, including those for fossil fuels and nuclear power. The bill would use the savings from the repeal of these credits (roughly $90 billion over ten years) to lower the corporate tax rate on everyone. Senator DeMint has introduced a companion bill in the Senate (S.2064), but it would be nice for the House GOP to provide a bold contrast from the bipartisan circus on the Senate.
We have a choice. We can either continue Obama’s Solyndra economy or we can chart a new course away from statist mandates and centrally planned green venture socialism. Which was is it, Senator Hatch?
Cross-posted from The Madison Project