GOP leaders have a message for any Republicans who dare hold a nuanced position on loan guarantees and clean energy deployment: Be quiet and get back in line to “where they’re supposed to be.”
That’s the message from GOP energy and environmental adviser Mike McKenna, who has been helping House Republican leaders wrangle dissenting lawmakers who’ve expressed concerns about their party’s attempt to dismantle the loan guarantee program.
The conflict emerged after Cliff Stearns (R-FL) introduced a bill called the “No More Solyndras Act” designed to end loan guarantees for clean energy. Rather than toe the party line, a few critical-thinking Republicans said they would rather see the the program reformed to better protect taxpayers, not kill the whole thing.
That didn’t sit well with leaders in the party who have made the loan guarantee program a political target this election season. Politico reported on the defection with the GOP after the legislation was introduced:
The spat over the bill started last week when Barton told his fellow committee Republicans at a closed-door meeting on the Solyndra bill that he opposed ending the loan guarantee program.
Barton publicly expressed his opposition to killing the program for the first time the next day at a joint subcommittee hearing on the legislation.
“I don’t think we need to throw out the whole program. I think we can clean it up,” Barton said, calling for a series of reforms to prevent another Solyndra-like bankruptcy.
In the end, supporters of the measure expect that nearly all committee Republicans will rally behind the bill.
“It’s been an interesting thing, but I think at the end everybody’s going to end up where they’re supposed to be,” McKenna said.
Barton was joined by fellow Texas Republican Michael Burgess and Georgia Republican Phil Gingrey, who publicly said they supported reforming the program rather than ending it. Politico reported that three other Republicans on the House Energy and Commerce Committee — Brian Bilbray, Mary Bono Mack, and Charlie Bass — also expressed concerns about the decision to kill loan guarantees.
It is perhaps no surprise that two Texas Republicans are being attacked for critical thinking — since the Texas GOP’s 2012 Platform actually opposes any teaching of “critical thinking skills.” The Platform contains a plank on “Knowledge-Based Education” that reads (on page 12 here):
Knowledge-Based Education – We oppose the teaching of Higher Order Thinking Skills (HOTS) (values clarification), critical thinking skills and similar programs that are simply a relabeling of Outcome-Based Education (OBE) (mastery learning) which focus on behavior modification and have the purpose of challenging the student’s fixed beliefs and undermining parental authority.
None of that fancy “knowledge-based education” for Texas!
As TPM notes:
Elsewhere in the document, the platform stipulates that “[e]very Republican is responsible for implementing this platform.”
Under these standards, Texas Republicans Barton and Burgess were way out of line.
The loan guarantee program was established in 2005 under the George W. Bush Administration. The program is designed to help bridge the “Valley of Death” by providing government backing of private loans for first-of-a-kind projects and innovative technologies. By guaranteeing that the government pays back the loan if a recipient cannot, the program helps leverage private financing that would otherwise not be available.
Many Republicans — including the three top House leaders who’ve trumped up the Solyndra bankruptcy — have been very supportive of loan guarantees. In 2007, House Energy and Commerce Chairman Fred Upton requested adding $4 billion to the program for new nuclear power projects; House Oversight Committee Chairman Darrell Issa pushed loan guarantees for nuclear projects in 2010; and Cliff Stearns, Chair of the House Energy and Commerce Subcommittee on Oversight and Investigations, requested loan guarantees for an innovative biofuels facility in his home state.
Why? Because these lawmakers understood that the program could fill in a major financing gap.
Since the three different loan guarantee programs were established, they have helped draw private financing for the world’s largest wind farm, some of the world’s largest solar plants, and the first nuclear power project in the U.S. in more than 30 years. Loan guarantees have financed 32 projects across 20 states, helping leverage $20 billion in private capital and create 22,000 jobs.
But after the bankruptcy of some higher-risk companies in the loan guarantee portfolio — Abound Solar, Amonix, Beacon Power, and Solyndra — Republicans saw an opportunity to turn this bi-partisan program into a political weapon. Even though these companies were supported by Republicans and represent only 5 percent of funds allocated for the program, GOP leaders have used them in an attempt to weave a fake political scandal.
So what happens if a Republican breaks rank and questions putting an end to a program the party has historically embraced? They’ll pay a political price. As soon as Representatives Barton, Burgess and Gingrey made statements in support of maintaining the loan guarantee program, the party rushed to bring them in line.
On Wednesday, the Wall Street Journal attacked each lawmaker personally. Not surprisingly, the editorial board’s argument was based on a distortion of the facts. The WSJ claimed that half of the loan guarantees had gone bankrupt. In fact, half of the solar manufacturers — a small fraction of the total program — had gone bankrupt. That’s a pretty glaring mistake for a publication focused on business and finance to make.
Republicans Joe Barton and Michael Burgess of Texas and Phil Gingrey of Georgia have defended this politicized venture capital operation. Messrs. Burgess and Gingrey didn’t return our calls, but Mr. Gingrey said in one hearing that “I’m not ready to say we should throw the baby out with the bathwater and just eliminate the loan programs entirely.” If not after four years of $1 trillion deficits, when? Mr. Barton has been one of the staunchest advocates of the subsidies and he told Politico last week: “I don’t think we need to throw out the whole program. I think we can clean it up.”
Bloomberg reports that half the solar companies that have received loan guarantees have gone bankrupt. Renewable energy deserves every chance to compete in the open marketplace backed by private investors. But DOE’s taxpayer bet on alternative energy is looking steadily worse over time, as abundant natural gas for electricity generation is making renewable energy less competitive even with subsidies.
Republicans will be fiscal frauds if they renew the very money-losing energy programs they attacked Barack Obama for. When the next Solyndra goes bankrupt, voters will have more than Mr. Obama to blame.
Accuracy issues aside, the editorial was effective in bringing Republicans on the Energy and Commerce Committee back in line. GOP Advisor Mike McKenna said “there’s no doubt that [the editorial] helped” change the attitudes of Republicans who had been “wandering” away from the party’s messaging strategy.
This awkward public conflict is illustrative of how House Republican leadership approaches the issue. Their goal is not to help make the program better or to find more effective ways to deploy clean energy — it is to turn loan guarantees into a political weapon.