‘Subsidy Summit’ Seeks Political Juice for Electric Carmakers
Amid gridlock over government spending and debt ceilings, green-energy advocates and rent-seeking businesses are convening in Washington, D.C. to renew their push for billions more dollars in taxpayer giveaways.
Wednesday’s gathering of the Securing America’s Future Energy Foundation (SAFE) could be called the Subsidy Summit.
Member companies – from General Electric to General Motors, which the federal government bailed out – lobbied Congress to pass S. 948 last year. The bill includes $2 billion in government grants to communities to put 400,000 electric cars on the road.
Still sitting on Capitol Hill, the measure also would set aside $25 million to electrify the federal fleet and put $235 million into research and development for electric vehicle batteries and infrastructure.
Betting on the come, FedEx plans to convert its fleet to electric. GM makes electric vehicles, GE provides charging stations — and pliable politicians are lending a hand.
Big Names, Tight Connections
Among the summit’s scheduled speakers are Carol Browner, Bill Clinton’s EPA chief; Daniel Akerson, chairman and CEO of GM; Jeffrey Immelt, chairman and CEO of GE; former Secretary of State Madeleine Albright, Mack McLarty, Clinton’s former chief of staff; and energy mogul T. Boone Pickens.
A few Republicans, including Indiana Gov. Mike Pence, will be on hand, too.
Marking the 40th anniversary of the OPEC oil embargo, SAFE asserts the oil market is not a free market.
Yet SAFE played a crucial role in mandating higher mileage standards. Those rules now act as a cap-and-trade system in which automakers, such as Ford, effectively subsidize exotic electric vehicle makers, such as Tesla Motors. That helps shave the six-figure price tags on Tesla cars for millionaire buyers, such as actor Matt Damon.
$7,500 Tax Credit
SAFE lobbyists helped push through a “zero emission vehicle” tax credit that has fueled Tesla’s profits. The federal ZEV subsidy guarantees a $7,500 tax credit to any buyer of electric cars.
California goes further with additional credits – and punishment. Aiming to create a car market that is 15 percent electric, the state is forcing non-electric automakers to buy ZEV credits from electric vehicle companies.
Thilo Koslowski, an auto-industry analyst at Gartner Group, told Forbes magazine that Tesla will reap an estimated $250 million this year from selling its credits.
‘Addiction to Handouts’
“We’re always told we have an addiction to oil, but the reality is companies have an addiction to taxpayer-funded handouts,” said Nick Loris, the Herbert and Joyce Morgan fellow at the market-oriented Heritage Foundation.
“The more the federal government attempts to plan our energy future, the farther away we get from a market that provides Americans with affordable, reliable energy,” Loris told Watchdog.org.
“We shouldn’t be focused on ending our dependence on oil, but instead focus on ending the addiction to energy subsidies.”
Beyond cars, other energy initiatives depend on political connections. Just ask gas man and wind farmer Boone Pickens.
“Pickens’ wife and a Pickens company gave Senate Majority Leader Harry Reid and PACs aligned with him hundreds of thousands of dollars when (Reid) faced a tight re-election contest in 2010,” The Huffington Post reported.
The Post called subsequent passage of natural-gas legislation favorable to Pickens’ enterprises “a return on the years and money invested in his relationship” with Reid, a Nevada Democrat.