Cash for Clunkers could raid renewable-energy loans
Trade-in program for fuel-efficient vehicles is popular with politicians and consumers alike. But a proposal to extend it could take money allocated for renewable-energy loan guarantees.
The money to fund an extended Cash for Clunkers program could come at the expense of renewable energy companies.
The House on Friday overwhelmingly passed a bill to extend the program which gives consumers up to $4,500 for trading in old cars for new, fuel-efficient ones with an additional $2 billion. The initial $1 billion set aside is said to be already or nearly exhausted.
The program has been popular with consumers as well as politicians who see it as a way to revive bleak auto sales. However, the House proposed paying for the extension by using $2 billion approved in the stimulus package for loan guarantees for renewable energy, which may not sit well with energy project developers.
Altogether $6 billion was provided for Department of Energy loan guarantees. Those loan guarantees would be made available to finance construction of large solar or biofuels projects. Project financing has become particularly difficult because of the credit crunch.
The Renewable Fuels Association, the main lobbying organization for the ethanol industry, put out a statement on Friday to indicate it is "concerned to see the program paid for by depleting the renewable energy loan guarantee program."
Senate Energy Committee chairman Jeff Bingaman said on Friday that he opposed using the Department of Energy's loan guarantee program to fund the Cash for Clunkers program. The Senate is expected to take up the measure next week.
"If Congress decides to extend this initiative, I believe we must not rob from the loan guarantees we provided through the recovery package that, in the long term, will shift our country to home-grown, renewable energy while creating good 'green collar' jobs," Bingaman said, according to a Reuters report.
Speaking on the House floor, Speaker Nancy Pelosi also voiced her concern and said that she hoped those renewable energy loan guarantee funds would be restored.
At a press conference, President Obama on Friday said that the he expects Congress and the White House to work to return funding the loan guarantee program "down the road."