Four groups – Taxpayers for Common Sense, Heritage Foundation, National Taxpayers Union and the Competitive Enterprise Institute – warned today that a number of energy boondoggles would remain in the federal pipeline under the No More Solyndras Act.
While the “No More Solyndras Act” would limit federal loan guarantees for future energy projects, it would allow dozens of major projects already in the federal pipeline to move forward. The four groups are concerned that a number of the “zombie” projects that would be allowed to live could be, in fact, even more costly to taxpayers than the widely publicized Solyndra loan-guarantee failure. So instead of being a fix for what ails the federal loan guarantee program, the No More Solyndras Act would countenance exactly the opposite of what its name suggests: the prospect of more Solyndra-like loan guarantee defaults, on an even larger financial scale.
Ryan Alexander, president, Taxpayers for Common Sense, said:
Despite some merits, ‘The No More Solyndras Act’ has a glaring loophole that should have it redubbed the ‘Even More Solyndras Act.’ The bill protects roughly 50 projects in the pipeline, including one that could cost taxpayers 15 times more than we lost on Solyndra. Lawmakers need to stop the program from putting taxpayers on the hook for billions in loan guarantees instead of passing bait and switch legislation.
Andrew Moylan, vice president, National Taxpayers Union, said:
The ‘No More Solyndras Act’ is an important effort to protect taxpayers against future losses from reckless energy loan guarantees, but it doesn’t do nearly enough to address boondoggles that were approved under the same failed regime that lost over $500 million on the Solyndra bankruptcy. While it takes the vital step of preventing new loan guarantees and improving transparency, Americans could still be on the hook for struggling multi-billion dollar projects. The House should amend the bill to strengthen provisions dealing with loan guarantee applications already in the pipeline to ensure that these ‘zombie’ projects don’t draw any more blood from taxpayers.
William Yeatmen, energy policy analyst, Competitive Enterprise Institute, said:
The No More Solyndras Act has a major flaw. The bill would end the Energy Department’s clean energy bank, which is great and is why we support it, but the fact is it sunsets the program too late to stop most of these subsidies from going out the door. Despite the bill’s weakness, it has engendered bipartisan opposition. These days, unfortunately, it seems that the only thing that both political parties can agree on is the merit of pork barrel politics.
Jack Spencer, senior research fellow, nuclear energy policy, Heritage Foundation, said:
The No More Solyndras Act begins to protect taxpayers from future bad bets the government makes with market-distorting loan guarantees. While setting a definitive end date to the program is important, this will not remedy the problem of loan guarantees still lurking out there. The legislation could be strengthened by ensuring that the risk of any loan that moves ahead is objectively determined and not skewed for or against any technology or project. It’s also important for the legislation to make sure the training wheels come off as soon as possible by requiring that the loan be privately refinanced once the project begins operations. To be clear, however, the federal government needs to get out of the commercial finance business altogether. The bottom line is that there is no set of protections that can make a loan guarantee program good, you can only stop the bleeding. No more Solyndras helps stop the bleeding.
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