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Support the “No More Solyndras” Act, H.R. 6213
An Open Letter to the House of Representatives:
August 27, 2012
Dear Members of Congress:
On behalf of the 362,000 members of the National Taxpayers Union (NTU), I write in support of H.R. 6213, the “No More Solyndras” Act, introduced by Reps. Fred Upton (R-MI) and Cliff Stearns (R-FL). This legislation will phase out the Department of Energy’s (DOE’s) substantially flawed Title XVII program, enacted by the Energy Policy Act of 1995. As the program winds down, the bill would provide taxpayer protection through greater transparency, increased accountability, and no subordination of tax dollars to those of other investors for paying back the DOE loans outstanding.
The DOE has a bad track record when it comes to picking winners and losers in the marketplace. Thanks to a lack of oversight and mismanagement, taxpayers have lost hundreds of millions of dollars on bad “green energy” bets, and there might be even more to come. According to a Wall Street Journal report, 10 out of 32 loan recipients are potentially at risk of default and are on federal watch lists. It is important for Congress to act now to turn off the money spigot.
At its heart, the Title XVII program is a toxic mix of unsound economics, bad energy policy, and crony capitalism. For years, the market-distorting government loans have propped up an unprofitable green industry, only for many companies to still fail – proving that no amount of easy credit can sustain an uncompetitive model indefinitely. CNN has reported that private investors are shunning green energy startups because they “haven’t proven they can be profitable on their own.” If these firms cannot demonstrate they are able compete in the open marketplace with affordable traditional energy sources, DOE shouldn’t be exposing taxpayer funds to the same risks that private investors are fleeing.
While it is irresponsible of Washington to keep throwing good money after bad, ultimately Title XVII’s problems point to a larger issue – the failure of this overreaching, politically controversial program indicates that not only is this something government shouldn’t do, it is something government can’t do. At a time when we are facing our fourth consecutive year of trillion dollar-deficits and a federal debt that just topped $16 trillion, it is especially callous of DOE to perpetuate this ruinous endeavor, even to the point of disseminating billions to massive international corporations.
Though the “No More Solyndras” Act is an important first step toward ending corporate welfare and reforming energy policy, we would urge Representatives to amend the bill to terminate the program in its entirety. As it stands, a giant loophole permits loan guarantees to those participants who applied before December 2011, via the same flawed review process as others who have defaulted.
One egregious example is a pending $2 billion loan to the United States Enrichment Corporation (USEC), a troubled company with junk-bond rating status that depends on bailout after bailout to continue operating. When H.R. 6213 was considered by the House Energy and Commerce Committee, both Republicans and Democrats voted down an amendment by Rep. Ed Markey (D-MA) to stop the USEC boondoggle. Politics as usual prevailed.
NTU urges all Representatives to not only co-sponsor the “No More Solyndras” Act, but to work for its passage – ideally amended to close out pending applications – before this Congress ends.
Sincerely,Nan SwiftFederal Affairs Manager