Schumer: New Report Confirms Billions in Stimulus Dollars for Clean-Energy Projects are Flowing Overseas, Costing U.S. Jobs

Press Release

Just days after Senator Charles E. Schumer (D-NY) called on the Obama administration to reform a clean-energy program in the stimulus that has funneled more than $1 billion to foreign companies, a new report by a coalition of business, environmental and labor groups endorsed the fix, saying the nation's reliance on foreign-made clean-energy equipment is costing the United States thousands of jobs.

The report, released by the Apollo Alliance, estimates that 70 percent of the components for clean-energy equipment like wind turbines and solar panels is currently manufactured overseas. The report predicted that if the trend is not reversed, it will cost the United States 100,000 jobs by 2015. To fix this, the report recommended reforms to the stimulus similar to those proposed by Schumer and other Senate Democrats.

The report can be read here.

"There can be no more disputing that this program is giving a leg up to overseas manufacturers at the expense of jobs here at home," Schumer said. "The point of the stimulus was to create jobs in the United States, not in China. There is a race going on to pioneer the next generation of clean-energy technologies and we should be building up our domestic industry, not subsidizing our foreign competitors."

Last week, Schumer--joined by Senators Sherrod Brown (D-OH), Bob Casey (D-PA), Jon Tester (D-MT) and Arlen Specter (D-PA)--introduced legislation to require projects seeking grants under a clean-energy program in the stimulus to rely mostly on U.S.-manufactured goods. The proposal came in response to reports that a proposed wind farm in west Texas planned to seek up to $450 million in stimulus aid even though the turbines for the project were being manufactured in China. Organizers for the project admitted last November that the wind farm would create close to 3,000 manufacturing jobs in China, and just a small fraction of jobs in the U.S. to install and operate the turbines.

While the senators work to enact their legislation, they have asked the administration to temporarily suspend the program, dubbed the "Section 1603" grant program, until it can be fixed. The administration and wind industry representatives have defended the program in its current form, saying that a suspension would jeopardize jobs in the United States. While it is true that the program has created a need for workers to install and operate wind turbines and solar panels, that number of jobs pales in comparison to the number of manufacturing jobs created overseas by the program. A recent report by the Investigative Reporting Workshop at American University calculated that 79 percent of the $2.1 billion in grants awarded through the Section 1603 grant program went to foreign manufacturers. Moreover, contrary to wind industry claims, the legislation does not apply domestic content requirements to the section 1603 convertible investment tax credit--a popular tax benefit for renewable energy producers. The legislation amends only the provisions of the section 1603 grant program, which was created in the stimulus bill passed by Congress last year. It does not make changes to the investment tax credit provisions.

"The bulk of the jobs created by these projects are manufacturing jobs, and the overwhelming percentage of the manufacturing is happening overseas. The point of the stimulus was to create jobs in America, and to turn down this opportunity to strengthen domestic manufacturing of wind turbines, solar panels and other clean-energy technology defies common sense," Schumer said.

The Apollo Alliance is chaired by Phil Angelides, the current Chairman of the Fiscal Crisis Inquiry Commission. Its board includes John Podesta, President of the Center for American Progress and former official with the Obama-Biden Transition Project; Frances Beinecke, President of the Natural Resources Defense Council; and Robert Borosage, President of the Institute for America's Future.

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