President-elect Barack Obama has asked the Democrat Congress to produce an economic stimulus bill that he can sign on his inauguration day. The price tag on this bill is already in the $500 billion to $1 trillion range, so it is going to be difficult to track all the boondoggle’s on it. But $15 billion of the stimulus behemoth will specifically be for Obama’s “green jobs” program, under which he has promised to spend $15 billion a year for the next ten years. Where is this “green” spending to go? The New York Times reports:
The details and cost of the so-called green-jobs program are still unclear … Congressional officials working with the Obama administration said the stimulus program was also likely to involve tax breaks or direct government subsidies for a variety of clean energy projects, including solar arrays, wind farms, advanced biofuels and technology to capture carbon dioxide emissions from coal-burning power plants.
So Obama wants to spend $150 billion on subsidies for ‘clean’ energy over the next ten years. And what does Obama’s new budget chief, Peter Orzag think of these projects? USA Today reports:
Orszag wrote a report in January saying that some forms of alternative-energy spending “are totally impractical” for stimulating the economy and others “could end up making the economic situation worse” by adding to the federal debt.
Orszag’s report said that grants to develop alternative-energy sources — which were one part of a Democratic stimulus package blocked by Republicans this fall — won’t help spur the economy. And big public-works projects, such as those to build power plants, take too long to get started to provide a quick economic jolt, Orszag wrote.
Funny Orzag that mention debt, because that is exactly how Obama plans to pay for all this ‘green’ spending. From the NYT:
During the campaign, Mr. Obama supported a measure to address global warming by capping carbon emissions while allowing companies to buy and trade pollution permits. He said he would devote $150 billion of the revenue from the sale of those permits over 10 years to energy efficiency and alternative energy projects to wean the nation from fuels that are the main causes of the heating the atmosphere.
But the Obama adviser who discussed the green energy project said Mr. Obama would not await passage of a global warming bill before embarking on the new energy and infrastructure spending. House and Senate supporters of a climate bill said they would continue working on legislative language but did not expect quick action on a cap-and-trade law because of the economic emergency.
That means that the green-jobs program would not be financed with pollution credits bought by power generators and other carbon emitters, but instead would be added to the budget deficit.
And supporters of cap and trade should not hold their breath waiting for Obama cap and trade legislation to materialize anytime soon. Kimberly Strassel writes:
Energy is the engine of, and inextricably linked to, the American economy. Environmental policies and regulations that punish energy markets will only deliver a further economic hit.
In the process, this will damage Mr. Obama’s own goals. He has picked an economic team that has already successfully discouraged him from proceeding immediately with any tax hikes. Good. But an ill-crafted cap-and-trade program that dramatically escalates energy costs is the same as a giant tax hike. Mr. Obama is promising to save or create 2.5 million jobs. Fabulous. But drowning industries in exorbitant energy prices will only encourage further overseas flight. If the president-elect thinks Detroit is a problem, just wait for the impact an upward march in electricity prices would have on, say, the manufacturing South.
This is the new reality. The president-elect can’t have it both ways.