Senate Finance Committee Passes Extension of Wind Energy Tax Credit; WSJ Editorial:Gone With the Wind August 2, 2012Posted by Laura Arnold in Uncategorized.
Tags: "Gone With the Wind" editorial by Wall Street Journal, Mitt Romney against subsidies for wind power, Senate Finance Committee votes to extend wind production tax credit (PTC)
Dear IndianaDG Blog Readers:
There is reason to celebrate a small victory for renewable energy today with the Senate Finance Committee’s passage of a one year extension of the Production Tax Credit (PTC) for wind that is scheduled to expire at the end of 2012. But let’s not count our chickens before they are hatched. This measure must still go to the full Senate. Just so you get a feel for the opposition to this, see the editorial from the Wall Street Journal (WSJ) entitled, “Gone With the Wind”. So let’s not be too smug about this victory today.
The next task is to figure out if Sen. Dick Lugar and Sen. Dan Coats, our two Republican Senators from Indiana will support the extension of the PTC for wind. Why don’t you contact them and ask them to support it? JUST DO IT!
Laura Ann Arnold
August 2, 2012, 3:50 pm
Senate Republicans rebuffed their presumptive presidential nominee as the Senate Finance Committee passed a one-year extension of the tax credit for wind energy, just four days after Mitt Romney’s campaign announced that it wanted the credit to die.
The lawmakers had tried to unite around the position of the Republican presidential hopeful, leaving the wind production credit out of a slate of business tax breaks to be formally drafted on Thursday. But that drive faltered when Senator Charles E. Grassley, Republican of Iowa, angrily told colleagues he would join with Democrats to add the extension back, according to Finance Committee aides. Rather than have a public fight, senators quietly inserted the one-year, $3.3 billion tax break before the committee took up the suite of tax breaks and passed them Thursday afternoon.
“It’s not right to single out one energy incentive over others before a broader tax reform debate,” Mr. Grassley said in a statement.
Senator Orrin Hatch of Utah, the ranking Republican on the committee, said presidential politics had nothing to do with the wrangling. Farm state lawmakers such as Mr. Grassley and Senator John R. Thune, Republican of South Dakota, simply were protecting an industry that is burgeoning in their regions.
Asked about Mr. Romney’s decision to jump into the fray, Mr. Hatch shrugged. “The fact is people can take positions on special issues,” he said. “It will irritate some people, and it also lifts some people too.”
Senator Olympia J. Snowe of Maine, another Republican on the Finance Committee, said China had “made quantum leaps, trying to capture the entire industry.” If Congress allowed the credit to end all at once, as Mr. Romney has endorsed, “basically you’d undercut the whole industry.”
Many conservatives disagree and are trying to eliminate all tax subsidies and let competing energy sources sink or swim on their own. But wind energy has become highly political as the election draws near. President Obama has loudly promoted the industry, and giving it federal stimulus money and backing tax credits. Mr. Romney took the opposite side.
And Iowa’s prominence as a swing state has only added to the bluster around wind power.
The tax package passed the committee, 19-5, with the most conservative members voting against it. The measure is likely to be a top priority when the Senate returns in September.
WSJ Editorial: Gone With the Wind
Romney takes a stand against energy subsidies.
Mitt Romney isn’t famous for taking political risks, so it was notable and welcome on Monday when he came out against subsidies for wind power. If that doesn’t sound like stop-the-presses news, remember that Republicans aren’t really as implacably opposed to energy handouts as both Democrats and Republicans want the public to believe.
So from the top: The wind industry more or less exists at the pleasure of politics, specifically because of a federal subsidy known as the production tax credit that provides developers with a 2.2-cent writeoff for every kilowatt hour of electricity they produce. In effect, the credit means that wind’s energy competitors are taxed at a higher rate. This annual $1.6 billion special advantage has hung around for a decade but lapses at the end of the year, and Washington is now debating an extension.
Holding fast on this deadline ought to be an easy call for Republicans, who say they want to make the tax code fairer and get the government out of picking energy winners and losers in particular. But a sizeable cheering section within the GOP wants to maintain the status quo.
Many are from Iowa and the other upper Midwestern states where the wind industry is concentrated, and, well, energy politics is often local. Others are afraid of President Obama’s rhetoric. He and other Democrats invoke the wind credit at every opportunity and claim its expiration would prove Republicans are against manufacturing and jobs.
Mr. Romney in the past has said the industry “seems to be operating more on faith than on fact-based economic calculation,” but lately he’s been reticent on the wind credit. If this was strategic ambiguity, the danger is that it might disillusion voters who send Republicans to Washington on principle, and not to give into the crony capitalist temptation as so many of them ultimately do.
In a statement to the Des Moines Register on Monday, the Romney campaign was definitive: “He will allow the wind credit to expire, end the stimulus boondoggles, and create a level playing field on which all sources of energy can compete on their merits,” a spokesman wrote. “Wind energy will thrive wherever it is economically competitive, and wherever private sector competitors with far more experience than the President believe the investment will produce results.”
Just so. The wind lobbyists claim that 100,000 jobs and many millions of dollars in turbine orders require the production tax credit to survive, not seeming to understand how sad such dependency and special pleading makes their industry sound. And congratulations to Mr. Romney for bucking his own party’s anti-free marketeers when the path of least resistance runs in the other direction. [emphasis added]
Printed in The Wall Street Journal, page 12
A version of this article appeared July 31, 2012, on page A12 in the U.S. edition of The Wall Street Journal, with the headline: Gone With the Wind.