by Richard W. Caperton

Imagine a government program that had produced dozens of success stories, cost less than expected, and helped build an industry of the future. Wouldn’t you want to expand that program?  Yes, you probably would.  Unless, of course, you were Rep. Cliff Stearns (R-FL).

If you were Rep. Cliff Stearns, you would introduce legislation to end the program.  And, if the program somehow did survive, your legislation would make sure that it operated with more bureaucratic red tape and weaker financial standing.

Welcome to the bizarre politics around the Department of Energy Loan Guarantee Program. Tomorrow, two subcommittees of the House Energy and Commerce Committee will consider a piece of legislation written by Stearns called the “No More Solyndras Act.”  Every aspect of this bill is bad. If Congress really wants to improve the loan guarantee program, they should do so by allowing it to fund many more projects with a full portfolio of financial tools. Let’s look at why.

The Loan Guarantee Program has been a success

First, some background. DOE’s loan guarantee program was created in the Energy Policy Act of 2005, and was strengthened in the American Recovery and Reinvestment Act (the stimulus bill). The program is built to provide financing to new clean energy technologies that the private sector is unable to finance.  These companies are trying to cross the “Valley of Death,” where they need many millions — even billions — of dollars to build new projects.  Traditional lenders won’t finance these projects because they’re generally the first-of-a-kind, and venture capitalists who would finance innovative projects simply don’t have enough money to meet these companies’ needs.  So, the government stepped in and guaranteed that they’ll pay back a loan if the company is unable to.  This guarantee unlocks capital.

The program has been an overwhelming success.  The loan guarantee program alone financed 32 projects in more than 20 states, ultimately creating 22,000 jobs directly. Best of all, the government only spent $2.5 billion to mobilize more than $20 billion in private capital.

Even projects without guarantees have benefited from the process. For example, the due diligence process helped bring in a $1 billion investment from Bank of America for the largest residential solar project in U.S. history. The chief executive officer of the solar company deploying the project said that without the due diligence process to attract private lenders, “We would not have been able to make the economics of this project work.”

Enter the “No More Solyndras Act”: A potential disaster

Despite the fact that the Title XVII loan guarantee program has been a success and should be expanded, Rep. Stearns’ legislation would effectively end the program, mandate unnecessary and duplicate consultations, and tie the government’s hands behind when it’s representing taxpayers.

The “No More Solyndras Act” does three main things:

1. It sets a retrospective deadline by which applications must have been received in order to be considered for loan guarantees. No application that was submitted after December 31, 2011, is eligible for a new guarantee.
2. It creates a new process for the Secretary of the Treasury to influence the outcome of a decision on a guarantee, and requires the Secretary of Energy to explain why he or she did or did not follow Treasury’s recommendation.
3. It says that taxpayers must always be the senior debt holder, even after a restructuring of a guarantee for a troubled company.

Each of these is a mistake.

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Rep. Cliff Stearns (R-FL) supports eliminating the Department of Energy (DOE), because the employees get to take off holidays like Presidents’ Day. Leader of an expensive witch hunt of the department’s support for renewable energy, Stearns has previously called for the firing of the Nobel-winning Secretary of Energy Steven Chu. At the same February 25 town hall meeting where he questioned Obama’s birth certificate, Stearns agreed with a constituent who called for the abolition of the nation’s nuclear, fossil, and clean-energy brain trust:

STEARNS: It seems to me we could take one — The Department of Energy is one that I feel we should probably cut their budget in half.

AUDIENCE MEMBER: No! We ought to get rid of it! Get rid of it! Don’t cut it, get rid of it!

STEARNS: I’ve asked for it. And I’m on a bill to get rid of it. You see, in public I try to be a little bit — but the Department of Energy was not — before Jimmy Carter we didn’t have a Department of Energy. Now we have this Department of Energy, it does about $30 billion in revenues we give them. And what are they doing to make us energy independent? And they’ve got thousands and thousands of employees. Every one of you would like to have one of their jobs. They start anywhere from 50 to 75,000 dollars. You’ve got a thrift savings account. You’ve got health care. You’ve got — You get off all these legal holidays. Presidents’ Day. I mean when I operated my motels and restaurants I never had a day off Presidents’ Day, or Lincoln Day. I never got any of these days off. I gave Christmas off probably, but even Christmas if a desk clerk got pulled I had to come in and help. I never got any of these days off. So I agree with you on the Department of Energy.

Watch it:

Stearns is correct that DOE employees get health care and national holidays. They include nuclear physicists, economists, mathematicians, and engineers, who could demand considerably higher salaries in the private sector working for oil companies or defense contractors. Under Republican rule, the House of Representatives — whose membership includes only 9 scientists and engineers — is only working 109 days this year.

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By Jessica Goad and Scott Keyes.

Rep. Cliff Steans (R-FL), a birther, one of the leaders of the Solyndra witch hunt and defender of subsidies to Big Oil companies, told constituents at a town hall meeting Belleview, Florida, on February 25 that “we don’t need any more national parks in this country” and that we need to “actually sell off some of our national parks”:

I got attacked in a previous town meeting for not supporting another national park in this country, a 200-mile trailway.  And I told the man that we don’t need more national parks in this country, we need to actually sell off some of our national parks, and try and do what a normal family would do is — they wouldn’t ask Uncle Joe for a loan, they would sell their Cadillac, or they would take their kids out of private schools and put them into public schools to save to money instead of asking for their credit card to increase their debt ceiling.

Watch it:

Our national parks represent America’s heritage, held in trust from one generation to the next.

Despite Stearns’ idea for a national-park fire sale, the facts show that parks, monuments, and other protected places generate a steady stream of wealth for both the treasury and local businesses.  In 2010, Florida’s Everglades National Park generated 2,364 jobs and over $140 million in visitor spending, and Florida’s 11 national parks in total provided $582 million in economic benefits.  The National Park Service also reports that America’s parks overall created $31 billion and 258,000 jobs in 2010.  In addition to their economic impacts, national parks have important value in that they are available to all of us for recreation, not just the wealthy few.

This is not the first time Republican members of Congress have advocated selling off Americans’ public lands without clarifying how taxpayers would get a fair return for them.  Last fall, Rep. Jason Chaffetz (R-UT) proposed selling off 3.3 million acres of the public lands that belong to all of us.  And former Rep. Richard Pombo proposed selling national parks to mining companies in 2005.

Republican presidential candidates have also recently been confused about the tangible and intangible values of our national parks and public lands.  Mitt Romney told the Reno Gazette-Journal that he doesn’t know “what the purpose is” of public lands, Rick Santorum told Idahoans that public lands should go “back to the hands” of the private sector, and Ron Paul advocated for public lands to be turned over to the states.

HT: Florida Political Action Cooperative.