Mr. President, I rise to speak in support of Senator Reid's amendment 525, which I cosponsored. This amendment will improve renewable energy permitting and give renewable energy companies grants to replace the renewable energy tax credits.…
Mr. President, I rise to speak in support of Senator Reid's amendment 525, which I cosponsored.
This amendment will improve renewable energy permitting and give renewable energy companies grants to replace the renewable energy tax credits.
Specifically, Senator Reid's amendment would appropriate $25 million to the Department of Energy and the Department of Interior to assist in renewable energy permitting; establish pilot offices in Western States to focus on renewable energy permitting, to be funded with oil and gas royalties; allow projects utilizing new renewable energy technology, not just ``commercial'' technology, to apply for Federal renewable energy loan guarantees; and establish a DOE grant program for renewable energy development, to substitute for the solar investment tax credit and the renewable production tax credit.
Let me explain why this amendment is needed.
First, let me discuss permitting.
First, Senator Reid and I propose $25 million to assist in renewable energy permitting. In California, BLM has more than 200 solar applications pending, and it has yet to complete a single application review.
The Bureau is overwhelmed, and it needs a relatively small investment in resources to ensure that it can quickly analyze how these project proposals impact water resources, endangered species habitat, and wilderness areas. Without these resources, we simply will not build the renewable energy projects that we need in the West.
In addition to adding financial resources, the amendment would establish pilot offices in Western States to focus on renewable energy permitting.
Senator Tester and I introduced legislation to establish these offices, and BLM established them administratively in January. The offices would be funded with oil and gas royalties, to assure that they have the resources necessary to process the rapid influx of applications.
Second, let me discuss financing.
The amendment would also modify the title 17 renewable loan guarantee program so that it may guarantee loans for emerging renewable technology, not just ``commercial'' technology.
Solar thermal facilities, the most advanced wind turbines, and enhanced geothermal projects are often the most economical renewable projects available, but they are considered emerging because they are the first of their type in the world.
The loan guarantee program in this legislation would exclude them. This change allows them to compete with wind projects.
Finally, let me explain the need for a grant program to replace the current tax credit system.
The amendment would establish a DOE grant program for renewable energy development. Grants would equal the value of the solar investment tax credit or the renewable production tax credit, which it would replace. For the next 2 years, renewable projects could claim the grants at a time when tax equity markets simply cannot support significant renewable energy production.
Last year Congress made a significant investment in solar and other renewable energy by passing a long term extension to the renewable energy investment and production tax credits.
But renewable energy companies must go to big banks--JP Morgan, Wells Fargo, or Bank of America--in order to use these tax credits, and today those banks don't have profits and are sending renewable developers away emptyhanded.
The ``tax equity'' market has gone from $5 billion to $2 billion in 1 year. One good wind developer recently told me he went to 42 banks and couldn't find a partner.
The few banks still in the business are increasing their profit margin. This is all transaction costs, benefiting the bankers and the lawyers who write these contracts but not renewable energy development. As the bank's cut goes up, the cost of renewable energy goes up as well.
As a result, solar and wind companies are contracting. Some have shut down, some have scaled back, but no one is building renewable energy infrastructure. We are losing both green jobs and the fight against climate change.
The DOE grants program in this amendment would replace the tax credits.
The shrinking tax equity market would no longer harm renewable energy developers, who could get back to the business of shifting the United States away from coal and gas towards renewable energy.
According to a study by Navigant Consulting in 2008, the 8-year extension to the solar investment tax credit should produce 276,000 jobs by 2016.
Mr. President, 150,000 of these jobs were forecast to be located in California. If the freeze in the available credit for solar project development is allowed to continue, not only will these jobs not materialize, but current ``green jobs'' will be lost.
This legislation provides some assistance to renewable energy, but without this amendment, I fear the bill will not have its intended effect of spurring immediate construction of renewable energy projects.
Right now renewable energy projects--which are massive capital investments--are not being built. Developers face a series of problems: Many projects await permits from DOE, the Forest Service, and the Department of Interior. Developers cannot use tax equity markets in order to utilize Federal tax credits, and without these tax credits, projects cannot secure private financing.
This amendment--put simply--addresses these three major challenges that prevent us from building renewable energy projects in the United States.
To address permitting, it establishes offices at BLM whose only job will be to evaluate and issue permit decisions.
To address the tax issue, this amendment creates a DOE grant program that should cost the Treasury nothing we didn't already expect to spend. But it will allow projects to proceed that would not be able to without it.
Finally, to address the credit crisis, this amendment modifies the loan guarantee program to assure that innovative ideas also qualify.
I strongly encourage my colleagues to support it.
(At the request of Mr. Reid, the following statement was ordered to be printed in the Record.
I thank my colleagues for their efforts on this issue. I agree that comparative effectiveness research holds great promise to improve medical care by giving physicians and patients valuable information on treatment options.
It is my understanding that the new Federal coordinating council included in the language is intended to coordinate the comparative effectiveness research efforts taking place across Federal agencies and with funds we are providing in this bill. However, there is some concern that the language, as currently written, allows the council to expand its activities beyond mere coordination. I think my colleagues would agree that the purpose of the council is to coordinate comparative effectiveness research activities with the goal of reducing duplicative efforts and encouraging coordinated and complementary use of resources.
That is accurate. The $23 million in funding for trail maintenance could be used for any of the eight National Scenic Trails in this country. Many of these trails are in disrepair, have unsafe crossings and uncompleted sections that could be repaired with this funding, creating jobs and generating economic value for surrounding communities.
Yes, that is our intent. All of the National Scenic Trails would be eligible for this funding, which would create jobs, generate economic value, and provide healthy recreational opportunities.
First, I would like to commend my colleagues for bringing this important matter before the Senate. EPA estimates that combined sewage overflows are responsible for releasing more than a trillion gallons of untreated and undertreated wastewater into our Nation's water bodies every year. I believe that additional funding provided through the Recovery Act for the Clean Water State Revolving Funds program will help alleviate the combined sewage overflow problem. I share the Senator's belief that the EPA should strongly encourage the completion of combined sewage overflow projects and I look forward to working with the Senator to address this serious problem in the years ahead.
Mr. President, I thank the distinguished chairman of the Finance Committee. I have had very little to do with this bill in the sense of writing it. I think most of us feel somewhat the same way. I am growing increasingly concerned about the bill, as to whether it is really going to be a stimulus. I come from a State which has more people unemployed today than the population of a dozen States; a State where the breadlines are growing, where the need for assistance is growing, where the State has a huge deficit, where counties are unable to fund their operating maintenance, where all capital projects have stopped, and where the State is now furloughing employees. I think while we dither, Rome burns. This crisis is so multidimensional and the dominoes are falling so much more rapidly than any of us thought and they are pushed from so many different points.
The fact is that people cannot get credit--credit for your big corporations to open a new hotel; credit, if you are a small employer, to pay your payroll. Credit remains frozen. The housing crisis continues to work its problems.
What, in my view, a stimulus is not, candidly speaking, is a tax package. I do not believe in this economy tax cuts are stimulus. The current state of the package, as I understand it, is that tax cuts are roughly 40 percent of the package; 20 percent is local assistance, State and local assistance; 15 percent is safety net spending; 15 percent is infrastructure spending--that is all--and 10 percent is other spending.
I do not know how many jobs are going to come out of this because it is my belief that people's buying patterns have changed.
This morning, a number of my colleagues talked about a report from the Congressional Budget Office, and what they did not do is they did not quote from certain parts of it. I would like to quote on what they found. Here it is:
A dollar's worth of a temporary tax cut would have a
smaller effect on GDP than a dollar's worth of direct
purchase or transfers, because a significant share of the tax
cut would probably be saved.
As a matter of fact, we have evidence of that. Last year, we approved more than $130 billion in tax cuts, primarily through a $600-per-person tax refund. After all of that money was spent in two tranches going out, there was little or no perceptible impact on the economy.
But we do not learn. In fact, study after study shows that upper income taxpayers are less likely to spend the refund checks they receive than those with low incomes.
According to a recent CRS analysis, tax cuts are likely to have a ``diminished stimulus effect.''
I point out that at the end of the day, I think there have been some significant layoffs. All along the retail industry, whether it is Starbucks or whether it is various retail establishments; like Gottschalks department stores--38 stores in California--going into bankruptcy; whether you have banks closing; whether you have Macy's laying off 10,000 people, buying patterns have changed. I read a study where people are not buying as much toothpaste. That is an indication that there is an angst out there, a worry about this economy.
The point of this package is to get jobs out to people. I reserve the right, at the end of the day, to vote against a package that I don't think puts those jobs out there. That is my point.