Energy Policy Act of 2005

ENERGY POLICY ACT OF 2005

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Mr. WYDEN. Mr. President, I rise in support of the Sununu-Wyden amendment to strike the so-called incentives title of this legislation because I believe this title is a blank check for boondoggles. The fact is, we are now at the point when some of the special interests in this country are going to be triple-dipping. They are going to get tax incentives as a result of the tax cut; they are going to get loan guarantees under the amendment of the distinguished Senator from Nebraska; and this amendment, this section that we seek to strike, offers additional loan guarantees.

These loan guarantees are not only costly, they are also risky. American taxpayers would be required, under title XIV, to subsidize as much as 80 percent of the cost of constructing and operating new and untried technologies. According to the Congressional Budget Office, the risk of default on these projects funded by guarantees is between 20 percent and 60 percent. The amendment that Senator Sununu and I offer today would block this unwise and risky investment and stop throwing good taxpayer money after bad.

I see our friend from Tennessee is here. He heard me discuss this to some extent in the Energy Committee. I have believed that this legislation is already stuffed with a smorgasbord of subsidies for various industries. As I touched on earlier, the buffet of subsidies is so generously larded that you are going to have industries in this country come back for seconds and even third helpings from this taxpayer-subsidized buffet table.

You look for examples: the Hagel amendment, which provides secured loan guarantees for virtually the same projects and technologies as title XIV loan guarantees; coal gasification, advanced nuclear power projects, and renewable projects receive up to 25 percent of their estimated costs for construction activity, acquisition of land and financing. There is no need to double the subsidies for these projects with the incentives under title XIV as well.

I want to be clear. I am not against incentives for new technologies. That is why, as a member of the Finance Committee, I supported the energy tax title that provides tax benefits for a variety of energy technologies, ranging from fuel cells and renewable technologies to fossil fuel and nuclear energy. So I am already one who has voted, at this point in the debate, to say that we ought to have some incentives with respect to these promising industries.

But what concerns me is the double- and triple-dipping. There is an important difference between the tax incentives that I supported in the Finance Committee and the loan guarantees under title XIV. The tax incentives that were produced on a bipartisan basis in the Finance Committee reward those who produce or save energy. By contrast, the loan guarantees subsidize projects whether they produce energy or not.

As I mentioned, the Congressional Budget Office says there is a very substantial risk of failure. I might even be persuaded to go along with the 25-percent subsidy provided by the Hagel amendment to help kick-start new energy technologies, but I don't think it is a wise use of taxpayer money to provide up to an 80-percent subsidy for the very same projects that would also get a 25-percent subsidy under the Hagel amendment.

Just with that example alone, you are talking about some projects that would receive a subsidy of 105 percent.

With respect to who reaps the benefits from these extraordinary loan guarantees, we know a variety of interests would. In my area of the country, we still remember WPPSS, the nuclear powerplants where there was a huge default and we had many ratepayers very hard hit. Our ratepayers are still paying the bills for the powerplants that were planned years ago but were never built. Skyrocketing cost overruns led to defaults. The collapse shows that Federal loan guarantees are a gamble that taxpayers should not be forced to take.

I am very hopeful my colleagues will support the Sununu-Wyden amendment. At this point, I think it is fair to say that we have voted for multiple subsidies for a lot of the industries that we hope will help to some degree cure this country's addiction to foreign oil. But at some point the level of subsidies ought to stop. I urge my colleagues to support the amendment, and I yield.

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Mr. WYDEN. Mr. President, when it comes to subsidies, without the Sununu-Wyden amendment, some of the country's deepest pockets will be triple-dipping. These industries get subsidies under the tax title from Finance. That is dip 1. The Hagel amendment, yesterday adopted, provides loans. That is dip 2. Title XIV that we seek to strike provides loan guarantees of up to 80 percent. That is dip 3. I urge Senators to join all the country's major environmental groups, all the country's major organizations representing taxpayer rights and support the bipartisan Sununu-Wyden amendment.

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