What’s the only thing worse than turning a Congressional investigation into a months-long political circus? The leaders of that investigation not having a firm grasp of the policies they’re supposed to be examining.
California Republican Darrell Issa chairs the House Committee on Oversight and Government Reform, one of the top bodies responsible for looking into the loan guarantee to the now-bankrupt solar manufacturer Solyndra. So you’d think that Mr. Issa would, after almost four months of investigation, be able to distinguish the extraordinary differences between a tax credit and a loan guarantee.
You would, sadly, be wrong.
In a shockingly ignorant commentary on the President’s State of the Union address last night, Issa blamed tax credits — the foundation of energy policy in this country — on the Solyndra bankruptcy, calling them a “scandal.” He was responding to this tweet, which was a response to the President’s call for Congress to extend vital tax credits for wind and other clean energies:
In a YouTube video message, Issa explained:
“We know that not only doesn’t it work out, but there are loads of additional scandals coming out and certainly the Administration is trying to double down on his ability to play political favoritism in the name of clean energy.”
Never mind that Issa has been a strong supporter of loan guarantees for nuclear energy and has requested multiple grants for clean energy companies in his district. Issa has also been a vociferous supporter of permanent tax credits for the oil and gas industry, which he calls absolutely necessary for job creation.
Yet, somehow, Issa and his colleagues in Congress have been completely silent on extending expiring short-term tax credits for the wind industry — a lapse that may cost the American wind industry 37,000 jobs next year. And when asked for his characterization of tax credits for clean energy, Issa gets them confused with loan guarantees and calls them a “scandal.”
For the record, here is the gaping difference between the two:
A tax credit helps finance project development through favorable changes in the tax code for industries the government wants to support. In fact, 44% of government energy spending comes through tax credits — including about $2 billion per year for the top five oil companies.
A loan guarantee is a completely different instrument. It provides a government backstop for a private loan in case the borrower defaults. These are designed for first-of-a-kind projects that may only be able to pull together private financing with backing from a credit-worthy entity like the federal government. The tax payer doesn’t pay anything unless a company defaults.
The loan guarantee program for renewable energy is over and done with — all the funds were deployed last fall. So the claim that the President is “doubling down” on the program that supported Solyndra is utterly false.
Instead, the President was simply calling for consistent tax policy for clean energy businesses — a set of conventional incentives that the oil and gas industries enjoy permanently.
In order make this distinction very clear after the Solyndra bankruptcy, we broke down how loan guarantees work to try to combat any confusion or misinformation. Clearly, Darrell Issa didn’t read our coverage.
Florida House Republican Cliff Sterns made a similarly dubious characterization in October, claiming loan guarantees are when the government “prints out the money” and hands it over. Sterns is chairman of one of the Congressional subcommittees investigating Solyndra.
So why would we continue to waste so much ink on this distinction?
Because these leaders are doing exactly what we expected when the Solyndra news broke. Rather than use the process to help make government investments more transparent, efficient and effective for the tax payer, Issa and others have taken the opportunity to call any support of renewable energy a “scandal” — even policies they support for the oil and gas sectors, like tax credits.
Meanwhile, the politics over Solyndra are having an impact on the broader economy, causing manufacturing businesses in the wind industry to prepare for a massive round of layoffs.