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Report by Obama Administration Pushes Handouts for Wind Industry

August 21, 2012 J,

A new report by the Department of Energy (DOE) distorts the facts, giving policymakers political cover to extend illogical subsidies for a favored industry. With the wind Production Tax Credit (PTC) set to expire at the end of the year, proponents of the handout have been scrambling to find any data they can to support their losing arguments. There to help policymakers in their feeble efforts is DOE Secretary Steven Chu. His agency has now released a full report filled with all the misleading information needed to defend the worthless wind PTC for yet another year.

Simply looking at the number of jobs the wind PTC creates ignores other important factors needed to decide if Americans truly benefit from the subsidy. The DOE report claims that the wind industry supports about 75,000 jobs. It is foolish and short-sided to assume that an industry’s value is only based on the number of jobs needed to maintain it. If an industry never produces anything consumers value, then the industry, and all the jobs in it, is simply a waste. For 20 years taxpayers have been footing the bill for the government’s $5 billion a year handouts for an industry that supplies just over 2% of our power. Without the wind PTC the energy sector would have allocated labor resources in a more rational manner, instead of concentrating them in an industry that satisfies practically none of our energy needs.

The DOE’s report wrongly assumes that the wind PTC is making the wind industry more competitive. Secretary Chu talks about the wind energy as if it is already competitive and will only remain that way if Congress extends the wind PTC. Pleas for industry handouts are nothing new. The government often claims the need to ensure a particular industry’s growth by giving it special credits or subsidies that other industries aren’t eligible to receive. The problem is that the industries receiving special treatment from the government often grow dependent on the help. Nobel laureate economist Milton Friedman said it best when he said, “The infant industry argument is a smoke screen. The so-called infants never grow up.”

Policymakers should know that using the tax code to pick winners and losers is crooked practice that only leads to needy dependence by the favored industry. Taxes should be used as a way of raising revenue, not as a way of choosing favorites. So-called “renewable energy” production is high on the President’s list of priorities. Because this industry is the new teacher’s pet, taxpayers have to foot bill to support it. Government needs to stop creating loopholes for favored industries in attempt to make that industry competitive; it never works, and it never will.

This report gives cowardly Republicans the political cover they’ve been looking in trying to evade the mounting pressure from taxpayers pushing for the PTC’s expiration. Recently the Senate Finance Committee passed a measure that would renew and dramatically expand several targeted tax credits for renewable energy, including the wind PTC. Their proposal is projected to cost taxpayers $12.1 billion over ten years. Should Congress spend any time at all trying to use this report to support their proposal, they will find nearly 100 pages full of useless and easily rebuttable data. Good luck trying to hide behind this one!

Americans for Prosperity has been tirelessly working to make sure that the Obama Administration stops the practice of picking winners and losers in the energy sector. We have opposed the Administration’s efforts to end coal-fired energy generation, we have fought hard to make sure natural gas production isn’t unduly burdened by regulation, and now we are holding the Senate’s feet to the fire to stop them from passing any bill extending the wind PTC.

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