Republicans Face Dilemma in Debate Over Wind Power Subsidy

August 17, 2012

Republicans have yet to reach consensus on how, or whether, to extend the wind power subsidy (Photo by Li Tsin Soon)

WASHINGTON — When Rep. Scott Tipton learned this week that a wind-turbine maker was laying off as many as 90 employees in his western Colorado district, the Cortez Republican expressed not only empathy with the newly unemployed but also frustration at Congress.

“(I)t’s heart-wrenching that 90 more Pueblo residents will have to go home and tell their families that they lost their jobs,” Tipton said in a press release that renewed his plea to extend the wind production tax credit. “What is most frustrating is that this could have, and should have been prevented.”

Tipton was frustrated in part because he met earlier this year with company officials of Vestas Wind Systems, the Danish turbine manufacturer that employs 1,700 in the Centennial State, and they told him the importance of the wind production tax to their business. He was frustrated also because he and all but one of Colorado’s nine-member congressional delegation had warned congressional leaders in February that this very scenario of mass layoffs might unfold.

“Unless the wind PTC is renewed in the first quarter of this year, new wind energy development projects and the thousands of jobs associated with those projects are predicted to drop off precipitously after 2012,” they wrote in a letter to the chairmen of the two committees which will help decide the bill’s fate. “This dire situation will be especially pronounced in Colorado, where we manufacture many of the components for wind turbines.” Now part of the delegation’s Cassandra-like prophecy had come true.

Yet Tipton’s support for the wind production tax credit is not unconditional. A fiscal conservative whose support from the tea-party movement helped him oust a Democratic incumbent two years ago, the 55-year-old lawmaker has said in order for him to vote for extending the credit, congressional leaders will need to find budgetary offsets.

“He wants to see a temporary extension that’s paid for,” Josh Green, his press secretary, said in an interview. “We don’t want to have extra (federal) spending.”

While Tipton is an idiosyncratic conservative who quotes Bill Clinton and endorsed a flat tax, he is not the lone tea-party backed House Republican whose support for the wind production tax credit is conditional. Rep. Cory Gardner (R-Yuma) is another.

“Cory believes the PTC should be extended if offsets can be found to pay for it,” Gardner spokesperson Rachel Boxer George said in an interview.

When President Obama urged Congress to pass the wind production tax credit in his three-day swing through Iowa this week, he said presumptive Republican presidential nominee Mitt Romney’s opposition to the credit was out of step with his own party.

“(W)hat we thought was a bipartisan consensus in supporting wind power has been fraying a little bit during election season. My opponent in this election says he wants to end tax credits for wind energy, wind energy producers that make all this possible,” he said Tuesday at a wind farm in central Iowa.

Rep. Doug Lamborn shares Romney’s opposition to the credit. “Government should not be in the business of picking winners and losers among industries,” the Colorado Springs Republican said in an interview August 2.

The credit provides a 2.2-cent tax credit for every kilowatt hour of energy they produce. It is estimated to cost the federal government $1.6 billion this year.

Many Republicans in Congress support the tax credit’s extension. When the Senate Committee on Finance considered the credit at a hearing on August 2, Republicans on the panel split almost evenly on the measure, with six voting to support the legislation, and five opposed.

While pro-tax credit Republicans believe the credit should eventually be phased out, they say allowing the credit to expire after December 31 will force companies to layoff more workers.

“As a former small business owner, I don’t think it would be right to pull the rug out from small businesses when they’ve come to rely on it,” Rep. Mike Coffman (R-Lone Tree) said in an interview.

But unlike in the Senate, a House committee has not approved an extension of the wind production tax credit. Republicans control the lower chamber and while House Majority Leader Kevin McCarthy supports the credit unconditionally, many rank-and-file Republicans are more hesitant.

Rep. Pat Tiberi, chairman of the Ways and Means subcommittee that is considering the wind credit, in June said reportedly that the committee had “a ways to go” before it would approve the credit. A Ways and Means Committee spokesperson confirmed in an interview that “(t)he extender review is ongoing for the totality of extenders.”

In states that produce wind energy, such as Colorado, conservative House Republicans face a dilemma that liberal Democrats do not. They must appeal to ordinary voters whose livelihoods may depend on the extension of the wind production tax credit; by one estimate, 6,000 jobs in Colorado would be lost if the credit is not continued. And they must appeal to tea-party activists who insist that the $16.8 trillion federal debt be reduced.

By contrast, Colorado’s Democrats do not make appeals to tea-party activists and voters, although they have made vague references to fiscal rectitude. The delegation’s letter in February called for “an incremental phase down of the credit over the long term.”

Senators Mark Udall and Michael Bennett spearheaded that letter, and each has promoted an unconditional continuation of the subsidy. Udall has made 15 speeches on the Senate floor about the need to extend the program, while for months the homepage of Bennet’s website has urged viewers to sign a petition to extend it, complete with the image of a begoggled Bennet standing on an elevated platform with countless wind turbines in the background.

Whether congressional negotiators can find compromise on the issue is unclear. Senate Republicans like Olympia Snowe expect a deal to get done this year, but House Republicans have made different predictions.

Green, Tipton’s ever ebullient spokesman, believes it will get done. “Finding offsets is not unreasonable,” he said. “It’s very doable.”

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