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30% Federal Grant for Renewable Energy Extended for 1 year
December 17 2010 - 1:43:55:pm by Greg
Congress passes extension of Bush-era tax cuts
Congress approved the most significant tax bill in nearly a decade late Thursday, overcoming liberal resistance to continue for two more years tax breaks enacted under president George W. Bush and to provide a fresh boost of federal support to the tepid economic recovery.
The package, brokered by President Obama and Republican leaders in the wake of the November elections, angered many Democrats, who have long argued that the Bush tax cuts were skewed to benefit the wealthy. But their last-minute campaign to scale back the bill's benefits for taxpayers at the highest income levels failed, and the House passed the measure 277 to 148, with 112 Democrats and 36 Republicans voting "no."
The $858 billion package now goes to the White House, where Obama plans to sign it into law Friday afternoon to prevent taxes from rising on New Year's Day for virtually every American household. The measure also will guarantee unemployed workers in hard-hit states up to 99 weeks of jobless benefits through the end of next year. And it will create major new incentives for business and consumer spending in 2011, including a two-percentage-point reduction in the Social Security payroll tax that would let workers keep as much as $2,136.
The incoming speaker of the House, Rep. John A. Boehner (R-Ohio), called the bill "a good first step" but emphasized the GOP view that major spending cuts are needed. "If we want to . . . begin creating jobs, we need to end the job-killing spending binges" by the federal government and "provide more certainty to business," he told reporters Friday on Capitol Hill.
Boehner hailed the "strong bipartisan vote" in favor of the package but argued that extending the Bush tax cuts for two years "will not end the uncertainty." He also vowed that the new Republican majority in the House next year would soon turn its attention to "killing the job-killing health-care law" that Obama signed in March.
Speaking on the House floor Thursday night before voting on the tax-cut package, Majority Leader Steny H. Hoyer (D-Md.) said, "This bill, the president of the United States believes and I believe, will have a positive effect on the economy." He said he was voting for it "because I don't want to see middle-income working people in America get a tax increase, because I think that will be a depressant on an economy that needs to be lifted up."
The package breezed through the Senate earlier this week on a vote of 81 to 19, giving Obama his strongest bipartisan victory on a major initiative since he took office. Opposition in the House crumpled in the face of that overwhelming showing, though House liberals insisted on offering an alternative that would levy a higher tax on estates than the Obama-GOP compromise will impose. That effort failed shortly before midnight, 194 to 233.
Obama administration officials Thursday night hailed the bill's passage. "We had a responsibility to protect middle class families from a tax increase that would have hit their paychecks and harmed the recovery," Treasury Secretary Timothy F. Geithner said in a statement. "And while we do not agree on everything in this legislation . . . this legislation is good for growth, good for jobs, good for working and middle class families, and good for businesses looking to invest and expand their workforce."
Liberals opposed the deal in part because they believe the temporary extension of the Bush breaks would eventually become permanent, setting lower tax rates far into the future. That would increase pressure on lawmakers to cut spending as a way of reducing record federal budget deficits, placing a host of cherished social programs in jeopardy.
But for Obama, the two-year window represents an opportunity to tackle the ambitious task of overhauling the federal tax code. By sunsetting current policies immediately after the 2012 presidential election, lawmakers in both parties said the measure sets a natural timetable for developing a tax-reform plan - an essential step toward reining in the rising national debt.
Obama placed numerous calls to House Democrats this week to urge their support for the deal, and got an earful in return. Rep. Elijah Cummings (D-Md.) said he told the president that one of his concerns was that "these tax cuts would not end in 2012, because in an election year, I think it's very, very difficult" to raise taxes.
Obama replied that the fate of the Bush tax cuts "would be part of his platform when he ran," Cummings said. "So it should be very interesting."
Republicans, too, have been pressing for a temporary extension of the Bush tax cuts as a bridge to tax reform. Like the last major tax overhaul in 1986, a new rewrite is likely to take years to draft and push through Congress. But White House officials have been encouraged by the level of engagement from Republicans, who will hold 47 seats in the Senate and take control of the House in January.
Key lawmakers in both parties have embraced a deficit-reduction plan produced by Obama's fiscal commission, which includes a tax overhaul that would lower rates across the board but raise additional revenue by closing dozens of long-standing loopholes, such as the mortgage-interest deduction claimed by many homeowners. Meanwhile, the relative ease with which Obama and the GOP were able to strike a deal over the Bush cuts has raised hopes on both sides for productive talks in the future.
"This is consensus on a very intractable issue: What do we do about expiring tax policy?" said Rep. Dave Camp (R-Mich.), the incoming chairman of the tax-writing House Ways and Means Committee, who was party to the tax negotiations. Camp, who has made comprehensive tax reform a top priority, said the talks were significant not only because of the policy that emerged "but also because of the process of coming together and reaching an agreement."
"I am very encouraged by what the president has been saying publicly. They do want to begin," Camp said. "And that is a big thing."
The bipartisan tax talks had another benefit: Unlike the pork-laden, $1.2 trillion annual spending bill that was jettisoned in the Senate late Thursday, the tax bill is virtually free of unrelated add-ons. Negotiators, in fact, excluded more than 70 temporary programs from the bill, including federal subsidies for state and local borrowing known as Build America Bonds, a sales tax deduction for new cars and trucks, a property tax deduction for people who don't itemize on their tax returns and an exemption from taxes for the first $2,400 of unemployment benefits. All those provisions will be allowed to expire.
Although Democrats were unhappy with the deal, Obama negotiated with Republicans only after Democratic lawmakers refused for months to address the issue of the expiring Bush tax cuts, raising alarm at the White House. Economists said a partisan standoff could have wreaked havoc on the economy by increasing withholding in virtually every worker's paycheck, raising taxes by about $3,000 next year on a typical family, according to White House estimates.
The concern was so great that Obama ultimately decided to break his long-standing vow to eliminate the Bush tax cuts for the wealthiest 2 percent of taxpayers. But with unemployment stuck near 10 percent, he was able to negotiate a big new dose of support for the economy, which Republicans had vowed to oppose.
In addition to the payroll tax holiday, Obama won a $57 billion extension of emergency unemployment benefits that will keep the program, which expired last month, alive through the end of next year. Republicans also agreed to support the largest temporary investment incentive in U.S. history, which permits businesses to deduct 100 percent of equipment purchases in the 2011 tax year.
For Democratic lawmakers, the most objectionable provision was a deal to reinstate the estate tax at 35 percent and to exempt estates worth as much as $5 million. Republicans have long argued that what some call the "death tax" is a threat to family farms and small businesses, though the nonpartisan Tax Policy Center estimates that only 100 family farms and small businesses paid the tax in 2009, when a more restrictive $3.5 million exemption was in effect.
The votes Thursday night were likely the final major legislative actions by the House Democratic majority, a low note following the party's landslide losses last month. Rep. Louise M. Slaughter (D-N.Y.) called the estate tax provision "an atrocious giveaway in a nation riddled with debt and unemployment." And Rep. Gene Taylor (D-Miss.), one of the defeated Democrats, delivered an impassioned speech before the vote, ending with the question "How much debt is enough?"
By Lori Montgomery and Shailagh Murray
Washington Post Staff Writers
Friday, December 17, 2010; 12:04 PM
Renewable-energy program has chance of extension
December 16 2010 - 2:39:41:pm by Greg
Congressional approval could happen as early as Wednesday to extend the 1603 cash grant program, which covers up to 30% of the cost of projects such as solar-panel installations. But amendments could derail the proposal.
By Tiffany Hsu, Los Angeles Times
December 15, 2010
In a last-minute push, a Senate committee cleared the way for congressional approval as early as Wednesday to extend the Treasury Department's 1603 cash grant program, which has funneled roughly $18 billion into nearly 1,500 wind and solar projects.
The program, which covers up to 30% of the cost of renewable-energy projects such as solar-panel installations, is set to expire by the end of the year.
The subsidy is lumped into a larger tax package that is expected to go up for a vote in the House on Wednesday. If it passes, installers of thousands of renewable-power projects in the pipeline — including small rooftop solar-panel installations on suburban homes and sprawling and remote wind-turbine farms — could tap the funds in 2011.
But the renewable-power industry isn't uncorking the champagne quite yet. Several amendments being suggested in the House "could derail the entire bill," said Rhone Resch, chief executive of the Solar Energy Industries Assn., a trade group.
"A one-year extension is an incredible shot in the arm for the industry," he said. "But we don't want to get ahead of ourselves. The compromise that has been worked out is very sensitive and fragile."
Last week, when it seemed the program might expire at the end of the year, renewable-energy companies were panicking. A renewal attempt had been shot down in Congress earlier in the month and then left out of a tax deal engineered by President Obama.
The industry dropped everything and went into lobbying overdrive, making dire predictions that hundreds of thousands of jobs could be lost without the ready government funds and that several years of record-breaking growth could be reversed. Without the program, financing for the sector could plunge 56% in 2011, according to a letter signed last week by Congress members pushing for an extension.
Residential installers cobbled together ads urging homeowners to act fast on solar-panel installations before the deadline. In recent weeks, several large solar projects in the desert also rushed to break ground before the program's expiration.
If the program is allowed to expire, renewable-energy companies could still tap a 30% tax credit, first offered in 2008, that is separate from the grant program. But that credit is seen as less desirable than the Treasury's grants.
Since the Treasury program pumps cash into projects faster, investors were more willing to lend a hand. Buoyed by the steady stream of government support, wind-power capacity has risen nearly 50% since the end of 2008 and solar capacity boomed 130% in 2010 alone.
After residential-panel installer SolarCity lost nearly a quarter of its workers during the recession, executives said, the Treasury program guided the company back to its feet, helped triple its staff to nearly 1,000 employees and coaxed investors back to the market.
Losing the grant would be "the most severe thing that could happen to the industry," said CEO Lyndon Rive.
But even if the program stays open, the industry will probably have to endure the same fight next year.
"We're really just moving the cliff out," said Mike Hall, CEO of solar installer Borrego Solar Systems Inc.
Government incentives for renewable energy have always been start-and-stop, said Jonathan Kim, a power and utilities analyst with Royal Bank of Scotland. The inconsistency makes many investors wary of making long-term bets on the industry.
So when grants and credits are being offered, developers flood the market with projects, then rush to complete them before the funds expire. Companies often agree to pay higher fees for construction and other services to meet the deadline.
Without the Treasury program, the renewable-power industry would be "in a bloodletting situation, where only the strongest will survive," Kim said. "It'd be a perfect storm that could kill off the renewable-energy sector for a while."
But some believe the industry might be too dependent on government handouts if the expiration of a single incentive could snuff it out.
The Treasury grant supported more than two-thirds of all solar and wind projects in construction this year. Homeowners already rely on local programs to shave down the cost of installing rooftop solar panels or making energy-efficiency upgrades. Larger projects use multimillion-dollar conditional loan guarantees from the Department of Energy to attract other investors.
Industry leaders, however, said they weren't looking at the program as a permanent crutch — just something to tide them over until the economy improves.
"We are nowhere near being subsidized to the level of the fossil-fuel industry," Resch said.
Black Hills Energy Pull the Plug on 93,000 Colorado Citizens
December 01 2010 - 2:01:57:pm by Greg
Black Hills Energy unexpectedly closed its solar rebate program on October 18,2010. This unfortunate action has effectively shut down all small businesses working in southern Colorado solar PV industry, and is likely to have negative impacts on small businesses throughout Colorado's young and growing solar industry.
(Credit- CoSEIA: http://www.coseia.org/newsite/black-hills.html)
According to Black Hills, they suspended their solar program due to ‘strong customer participation' that led to upfront costs. But adding a coal plant has significant upfront costs. Natural gas fired power plants also have upfront costs. Both are commonly financed and repaid, often through 60 year bonds. If Black Hills can finance fossil fuel generation over 60 years, why can't they finance renewable generation over 20 or 30 years? This is allowed under Colorado law (HB-1001) and is a simple and appropriate solution.
Coloradans Want Clean Energy Jobs
Colorado voters have made it clear that they want to increase renewable energy use - to attract new businesses, generate jobs and save consumers money. In 2004, Colorado voters overwhelmingly approved Amendment 37 to generate 10% of the state's electricity from renewable sources. With this goal now achieved, a new goal was set at 30% renewable energy by 2020. But how is Black Hills going to achieve this legal requirement if it suspends its most popular renewable energy program?
The solar industry is one of the fastest growing industries in the world. There are more than 93,000 solar jobs in the U.S. The number of solar jobs has doubled in the last year and is expected to double again in the next few years. And thanks to smart policies and entrepreneurs, Colorado is now #2 in the nation in solar jobs per capita. In today's tough economy we need to promote job growth, not layoffs