Top Five Reasons Congress Shouldn’t Slash Funds for Advanced Vehicle Manufacturing to Pay for Disaster Relief

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"Top Five Reasons Congress Shouldn’t Slash Funds for Advanced Vehicle Manufacturing to Pay for Disaster Relief"


The Advanced Technology Vehicle Manufacturing (AVTM) program was created in 2008 under President Bush to provide loan guarantees for automakers producing next-generation vehicles. So far, the program has supported projects for ultra energy-efficient and electric vehicles, helping create jobs and enhance America’s competitiveness. But Congressional Republicans have proposed slashing funding from the AVTM program in order to set aside money for disaster relief.

Holding this program hostage sends the wrong message to businesses during these tumultuous economic times. We’ve compiled the top five reasons why stripping funding from the AVTM program to pay for disaster relief is a bad idea — plus a bonus reason at the end:

  1. It creates jobs at a time when America needs them the most. The American economy experienced zero net job growth in August 2011. The Advanced Technology Vehicle Manufacturing program (ATVM) directly created 39,000 jobs and is responsible for another 2,600 construction jobs in 11 states. An additional 18 loan applications in progress are projected to create 50,000 – 60,000 more jobs.
  2. It promotes the production of fuel efficient vehicles. The projects would reduce gasoline use by more than 311 million gallons annually. According to the Government Accountability Office, “the projects for enhanced conventional vehicles as a whole are expected to achieve fuel economy that exceeds the CAFE [Corporate Average Fuel Economy] targets by, on average, 21 percent.”
  3. It invests in green technology, in which the private sector still under-invests. Because the impacts of inefficient vehicles are not immediate and concentrated, but long term and widely dispersed, the private sector does not allocate enough money to address the problem. This is why we need to utilize government resources to invest in green technology.
  4. It has repaid the majority of its loans. ATVM had to go through a rigorous review process by the Loan Programs Office at the Department of Energy to make sure that it has a reasonable prospect of repayment. ATVM passed and, to date, it has returned two-thirds of its loans.
  5. Americans should not have to choose between fuel efficient cars and job creation and disaster relief. Congressional Republicans would like to redirect funds from ATVM to pay for damages from extreme weather. Both of these programs are much needed and Congressional Republicans should look elsewhere to make cuts in the budget.

— Cole Mellino, Center for American Progress intern

Bonus Reason:

Many of the disaster funds would go to help people suffering from floods, storms, and other types of extreme weather linked to climate change. Cutting funding for advanced vehicles that would produce less carbon dioxide pollution to pay for extreme weather disaster relief is like cutting funds for Smokey the Bear’s wildfire prevention campaign to pay for wildfire damage.

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9 Responses to Top Five Reasons Congress Shouldn’t Slash Funds for Advanced Vehicle Manufacturing to Pay for Disaster Relief

  1. Hot Rod says:

    An interestingly typical blog post.

    1. It creates jobs at a time when America needs them the most. – there are a lot of ways that can be done, in a lot of sectors. For the jobs to be sustainable they have to wean themselves off subsidy in a realistic space of time.

    2. It promotes the production of fuel efficient vehicles – there are a lot of ways that can be done, from increased taxes on gas to tax breaks for low mpg vehicles and graduated taxes on high mpg ones. Us Europeans pay over $8 per US gallon and drive more efficient vehicles as a result.

    3. It invests in green technology, in which the private sector still under-invests – there are lots of areas where this can be done, research into solar or thorium, Gen 2 ethanol, whatever. Government must be careful about picking winners too. The ‘greenness’ of electric vehicles, from soup to nuts, is not clear, in comparison with other ways of investing the money.

    4. It has repaid the majority of its loans – I don’t know about this area.

    5. Americans should not have to choose between fuel efficient cars and job creation and disaster relief. – sorry, but choices with finite tax revenue is a large part of what government is about.

    The bonus reason? Surely the author is aware that the US emits less than 20% of global CO2, and that domestic CO2 cuts (given the dominance of fossil electricity generation in the US will electric vehicles even cause a cut of any significance?) will be more than matched by foreign increases?

    This program may be useful, money well spent. But not for any of the reasons given.

    • Leif says:

      Hot Rod, you site the US CO2 output at 20% of global but the US exceeds by far the world average per/capita output. That represents lots of money given to oil barons and foreign oil nations. Not staying in your pocket. Much of that money is credit that you pay interest on as well. Wake up Hot Rod.
      http://maps.grida.no/go/graphic/national_carbon_dioxide_co2_emissions_per_capita

      • Hot Rod says:

        Leif the specific point in the ‘bonus reason’ given was that lower (than BAU) US CO2 emissions would help lower the US need for disaster relief.

        But (accepting that the link is, or will become, material) it’s global aggregate CO2 emissions that matter, not the two points you make – per capita emissions and who produces and refines oil.

        My point was specifically about global aggregate emissions, the point the writer was making.

  2. SecularAnimist says:

    Reason #2 is exactly why the Republicans want to slash the program: increasing the fuel efficiency of vehicles reduces oil consumption, which is not good for increasing the profits of the fossil fuel corporations.

    Funding disaster relief is just an excuse.

  3. Chris Winter says:

    But all those things you mention — creating jobs, developing green technology and fuel-efficient vehicles — are not being done to any large extent by the private sector, absent federal encouragement. And so we come back to the long-debunked Republican claim that cutting taxes on the wealthy will create jobs because they will invest in companies. It didn’t happen during the GW Bush administration and it isn’t happening now, AFAICS. They’re investing, all right, but mostly in financial instruments and in politics.

    And you commented, Hot Rod, that “For the jobs to be sustainable they have to wean themselves off subsidy in a realistic space of time.” Do you mean, like oil-industry subsidies? ;-)

    • Jay Alt says:

      One hundred fifty years is only a speck in geologic time. You can’t expect our Oil Monopolies – poor, unprofitable, cash-strapped and honest as the day is long – to forego their ‘birthrights.’ Perhaps they could give up slopping the public trough in 7 or 8 decades. But to just stopping the addiction cold turkey is really hard. Meanwhile, US citizens must be content with our lot as we live in the best of all possible worlds. And in a sucker-nation that receives the smallest payment for oil leases anywhere on the planet.

    • Hot Rod says:

      Chris, be realistic. I know you put a smiley, but I somehow don’t believe the US oil industry is actually dependent on whatever (rather tiny as a % of anything really) subsidies they manage to bribe out of government.

  4. dbmetzger says:

    From Deutche Welle…

    Tuk Tuks Arrive in Europe
    The Tuk Tuk: a vehicle with three wheels and a 2-stroke engine. Originally designed in the 1950s, they’ve only managed to go the distance in developing countries in Africa, Thailand and India. But an electric version is about to hit the streets of Europe. http://www.newslook.com/videos/349848-tuk-tuks-arrive-in-europe?autoplay=true

  5. Michael Tucker says:

    Let’s face it, Republicans are not interested in creating jobs, developing green technology, and especially not developing fuel-efficient vehicles. They say f#$k-you to disaster victims and they will continue to terrorize the American economy. Expect nothing good to come of this nightmare.