New York Times: Proposal Ties Economic Stimulus to Energy Plan
By JOHN M. BRODER
WASHINGTON — President-elect Barack Obama and leaders in Congress are fashioning a plan to pour billions of dollars into a jobs program to jolt the economy and lay the groundwork for a more energy-efficient one.
The details and cost of the so-called green-jobs program are still unclear, but a senior Obama aide, speaking on the condition of anonymity to discuss a work in progress, said it would probably include the weatherizing of hundreds of thousands of homes, the installation of “smart meters” to monitor and reduce home energy use, and billions of dollars in grants to state and local governments for mass transit and infrastructure projects.
The green component of the much larger stimulus plan would cost at least $15 billion a year, and perhaps considerably more, depending on how the projects were defined, aides working on the package said.
During the campaign, Mr. Obama supported a measure to address global warming by capping carbon emissions while allowing companies to buy and trade pollution permits. He said he would devote $150 billion of the revenue from the sale of those permits over 10 years to energy efficiency and alternative energy projects to wean the nation from fuels that are the main causes of the heating the atmosphere.
But the Obama adviser who discussed the green energy project said Mr. Obama would not await
passage of a global warming bill before embarking on the new energy and infrastructure spending. House and Senate supporters of a climate bill said they would continue working on legislative language but did not expect quick action on a cap-and-trade law because of the economic emergency.
That means that the green-jobs program would not be financed with pollution credits bought by power generators and other carbon emitters, but instead would be added to the budget deficit.
Congressional officials working with the Obama administration said the stimulus program was also likely to involve tax breaks or direct government subsidies for a variety of clean energy projects, including solar arrays, wind farms, advanced biofuels and technology to capture carbon dioxide emissions from coal-burning power plants.
The programs will be a part of a larger economic stimulus package whose outlines are faint but which is expected to cost $400 billion to $500 billion. Mr. Obama has said that his goal is to create or save 2.5 million jobs in the next two years. He has assigned to his economic and environmental advisers the task of devising a proposal that is expected to combine a shot of new federal money into existing federal and state programs and the possible creation of agencies modeled on New Deal public works programs.
“We’ll put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children, and building wind farms and solar panels, fuel-efficient cars and the alternative energy technologies that can free us from our dependence on foreign oil and keep our economy competitive in the years ahead,” Mr. Obama said in a radio address last month, echoing a campaign promise with a new sense of urgency.
The political climate seems favorable to an economic stimulus plan, but large sums of new money touch off lobbying frenzies and energy projects spur debate between conservationists and those who want to more fully exploit domestic sources of oil, natural gas and coal.
Some experts said the record of government’s intervention in energy markets and new technologies was not promising, citing as a spectacular example the Carter-era Synthetic Fuels Corporation, which spent more than $3 billion without producing any commercially usable amount of coal-based liquid fuel.
Ethanol and other non-oil-based fuels have also not proved their commercial value, in some cases yielding less energy than was needed to produce them, or, in ethanol’s case, diverting land to corn and driving up food prices.
The plan could also face resistance from fiscal hawks. In 2004, Senator John McCain, Republican of Arizona, almost single-handedly blocked a $100 billion energy package, saying the billions of dollars in subsidies for ethanol and other alternative fuels were little more than a special-interest boondoggle.
The bill was revived a year later at half the cost, and much of the money in it has not been spent.
“Now they’re talking about some large amount of money — what, $100 billion? — and spending it on windmills, job training, whatever,” said David Kreutzer, who studies energy economics and climate change at the Heritage Foundation, a conservative research group. “But where do you get the $100 billion in the first place? Are you going to take $100 billion from some other part of the economy, are you going to tax some people to pay for it? Are you just going to print it or borrow it? The money has to come from somewhere.”
The Obama team and Congressional leaders say they want a plan ready shortly after Congress reconvenes in January.
Mr. Obama has said that, after stabilizing the economy and the markets, putting the nation on the path to a more energy-efficient future is his top priority. The House speaker, Nancy Pelosi of California, said this week that rebuilding infrastructure and creating green jobs was “the first order of business that we will have” when Congress reconvenes in January. Several hearings are planned even before Mr. Obama takes office on Jan. 20.
State officials say a lack of financing has stalled billions of dollars in projects. Gov. Arnold Schwarzenegger of California told Mr. Obama this week that the states were ready to break ground with $136 billion in infrastructure projects that could provide new jobs within two years.
The American Public Transportation Association, which represents local mass transit authorities, said there were $8 billion in “ready-to-go” projects that could preserve or create thousands of jobs and provide more energy-efficient transportation.
Beverly A. Scott, the chief executive of Atlanta’s transit agency and head of the national association, told Congress in October that the projects included diesel-electric hybrid buses for Chicago; a new bus maintenance shop for Eugene, Ore.; and a set of crossover tracks to allow San Francisco’s rapid transit trains to turn around more quickly and carry more riders.
The Obama aide said the residential smart meters were a relatively small project that would not create a large number of jobs, but the aide said they would be an essential building block for the electric grid of the future. The new grid — a multiyear, multibillion-dollar project — would more efficiently move electricity from its source to its destination and would reward those who saved power or used it during off-peak hours.
Senator Jeff Bingaman, Democrat of New Mexico, who heads the Energy and Natural Resources Committee, said he was sympathetic to Mr. Obama’s desire to pump up the economy and reduce energy usage. But Mr. Bingaman said he was wary of big government spending programs without sufficient oversight or expertise.
“Just buying smart meters for everybody doesn’t really move the ball very far,” said Mr. Bingaman, who will hold a hearing next week to gather ideas for energy-related stimulus spending. “Realistically speaking, getting money properly spent in a short period of time requires some degree of competence in the government agency doing it. The best plan is to start with existing programs that work, like weatherization, and build on those.”