Democrats push ‘green’ energy tax breaks

Emerald City

Los Angeles Times Staff Writer

As Senate Finance Committee Chairman Max Baucus talked up his proposal Monday to expand a multibillion-dollar economic stimulus package, he spoke of the need to help seniors, disabled veterans and the unemployed.

There was just one industry the Montana Democrat singled out for special assistance: renewable energy.

As Senate Democrats push ahead with legislation to blunt a possible recession, they are trying to get support for tax breaks for wind-farm developers, builders of more efficient appliances and businesses that install fuel cells.


It is unclear whether there is sufficient GOP support to make the incentives part of a stimulus package expected to be considered Wednesday when the Senate could take up the version passed by the House.

But the proposed benefits for green energy mark another advance for an industry that is becoming one of the darlings of Democratic-controlled Capitol Hill.

“It’s a unique moment in history for the renewable industry,” said Scott Segal, a longtime energy lobbyist in Washington. “The one thing that the Chamber of Commerce and the Sierra Club agree on is that the answer to climate change is transformative technologies.”

Many of the tax incentives were created years ago by lawmakers from both parties eager to showcase their commitment to the environment. They are not permanent, however, and require frequent reauthorization -- which industry executives complain makes planning and investment difficult.

This year, as Baucus pulled together a Senate alternative to the stimulus package approved by the House, Sen. Maria Cantwell (D-Wash.), a leading advocate of alternative energy, pushed to include an extension of the tax breaks.

The incentives include credits for wind, solar and other renewable energy producers that could be worth as much as $3 billion over the next 10 years, according to an estimate by the Joint Committee on Taxation.

There are smaller credits for the construction of more energy-efficient homes, the production of energy-efficient appliances and for residential use of solar panels.

The package also includes credits for some coal production, which many lawmakers see as a potential substitute for foreign oil.

Past stimulus bills have not typically included tax breaks targeting specific industries.

The proposal faces opposition from many Republican lawmakers who are trying to limit the scope of the stimulus package as well as some liberal groups pushing for more direct aid to those suffering most in the economic downturn.

“It makes no sense in a stimulus package,” said Chad Stone, chief economist at the Center on Budget and Policy Priorities. Stone and others argue that direct payouts, such as unemployment insurance or food stamps, pump money into an ailing economy more quickly.

Wind, solar and other energy producers have lobbied to showcase the jobs created by the burgeoning sector.

As importantly, they have found a receptive audience among Democratic lawmakers eager to cast themselves as clean-energy champions who are combating global warming and weaning the country from its dependence on Middle Eastern oil.

“Americans want to be energy independent,” Baucus said Monday, adding to a drumbeat of speeches by Democratic senators in recent days. “We must move aggressively.”

The fate of the tax credits is dependent on Baucus’ larger stimulus package, which includes rebate checks, extended unemployment benefits and other business tax breaks.

The Baucus plan -- which would pump an estimated $204 billion into the economy over the next two years -- substantially expands on the House plan. That plan includes rebates and business tax incentives as well as aid for the real estate market. But it does not include rebates to many senior citizens on Social Security and does not extend unemployment benefits. The House plan also does not include the renewable energy tax credit.

Senate Democrats plan to vote on Baucus’ proposal Wednesday.

If it does get the required 60-vote supermajority, Democrats may offer a series of amendments to augment the House-approved package.