Monday, February 13, 2012

Budget 2012: Clean energy and the environment are on the front lines, again

by Jerry Bloom

The 2012 budget war commenced in earnest today as President Obama presented his spending proposal: Once again, clean, renewable energy and environmental sanity are at the heart of the package. The question is, will the GOP once again gut it like a fish and leave it for dead?

Big oil, big breaks
One of the biggest battles of the past few years has been over tax breaks for big oil and big gas. These huge companies have been obscenely profitable over the past few years, but the GOP continues to cling to the idea that they need huge tax incentives or they’ll just lie and down and refuse to drill, baby, drill.

President Obama proposed cutting those breaks last year – at a time when everyone on the GOP was insisting “We’re broke and we can’t afford ANYTHING,” and yet they still managed to preserve this huge boondoggle for their corporate pals.

This year, President Obama is proposing cuts again: $39 billion over a decade.
“Repealing fossil fuel tax preferences helps eliminate market distortions, strengthening incentives for investments in clean, renewable, and more energy efficient technologies,” the budget plan states.

The fossil fuel industry (via American Petroleum Institute CEO Jack Gerard) responded by whining, “Increasing our taxes would push oil and natural gas investment overseas and diminish job-creation and economic activity here at home.”

Really? They’re saying that without government subsidies they just wouldn’t be cost-effective? How sad…

On the other hand, the budget does include funding for the Department of the Interior to boost oil and gas production, particularly on public lands in the west. That will be party balanced out by $450 million to preserve public lands and  $28 million for new inspectors to make sure that we don’t have a repeat of the BP Gulf Oil disaster.

Clean energy, big priority
In contrast, the GOP has attacked subsidies for the growing field of clean, renewable energy, saying “The government shouldn’t pick winners and losers (unless it’s oil).”
They’ve fought money for solar and wind power, even as the Chinese government pumps up the sector at home.

The President’s budget calls for:
  • A clean energy standard for electricity production, so that by 2035, 80 percent will be come from low-carbon sources like wind, solar, natural gas and nuclear
  • $2.33 billion for the Office of Energy Efficiency and Renewable Energy, a 29% increase
  • $5 billion for the Office of Science, a 2.4% increase
  • $1.2 billion for energy efficiency, including clean vehicle technologies
  • $310 million for the  SunShot Initiative for cost-competitive solar energy
  • $95 million for wind energy
  • $65 million for geothermal
  • $350 million for the Advanced Research Projects Agency–Energy (ARPA-E) for transformative energy innovation research
  • $770 million to develop small modular reactors
  • Extended renewable energy tax credits
  • NO additional funding for the loan guarantee program for clean energy projects that has been under attack by the GOP since solar company Solyndra failed.

“In light of the tight discretionary spending caps, this increase in funding is significant and a testament to the importance of innovation and clean energy to the country’s economic future,” the budget request says.

“The choice we face as a nation is simple: do we want the clean energy technologies of tomorrow to be invented in America by American innovators, made by American workers and sold around the world, or do we want to concede those jobs to our competitors? We can and must compete for those jobs,” Energy Secretary Steven Chu added.

While the EPA faces a small 2.1% decrease in its budget, that’s a far cry from GOP proposals, which range from “slash it” to “kill it completely”.

Still, it seems like a strange negotiating tactic: When your opponents want to cut something, you don’t START by pre-emptively meeting them halfway. That sure hasn’t worked out in the past, and it’s probably a mistake now.

Cuts include:
  • Money for hazardous waste site cleanup
  • A program to reduce indoor radon exposure
  • A program to monitor beaches to make sure they’re safe enough to swim (maybe they can get BP to volunteer to fund this one?)
  • A program to help states improve infrastructure and drinking water treatment

Increases include
  • $66 million for air quality programs to help states meet new regulations
  • $5 to hire more inspectors for high-risk oil and chemical plants

Sadly, Obama’s transportation priorities are probably as dead in the water as the GOP’s. He’s once again calling for $47 billion for high-speed rail (down $6 billion from last year’s proposal), but the House and Senate will probably block that completely.
He’s also calling for $50 billion in up-front infrastructure spending to boost jobs creation this year, but improving the economy is also the last thing the GOP wants to do right now.

How much gets cut? Who pays? Those will be the key questions as the election heats up.

Other items include:
  • $350 billion in jobs programs (over 10 years)
  • $476 billion in infrastructure spending  (over 10 years)
  • Ending the Bush tax cuts for families earning more than $250,000 a year
  • Adding a Buffett Rule provision (a mimum 30% tax rate on those making more than $1 million, so that millionaires don’t pay lower tax rates than their secretaries).

“In the long term, we need to get the deficit under control in a way that builds the economy that can last for the future,”White House Chief of Staff Jacob Lew said Sunday on ABC’s“This Week.” Obama wants to do that “in a way that’s consistent with American values so that everyone pays a fair share.”

Don’t expect any answers for a while. Last year the budget didn’t get passed until weeks after election day. This year, expect this to drag out to the last possible minute… and then some.

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