Sow the Wind, Reap the Whirlwind: Congress Extends Wind Subsidies in Fiscal Cliff Deal
By Christine Harbin
While many people are focused on the changes to income tax rates in the fiscal cliff deal, they overlook some other important tax changes that are included in the deal. Disappointingly, the fiscal cliff package is riddled with billions in blatant corporate welfare. One change that got slipped into the deal at the 11th hour is a measure that would extend the wind production tax credit (PTC) for 1 year, alongside several additional targeted tax credits for renewable energy, at a cost of $12 billion.
So, while individual taxpayers in America are seeing higher taxes in 2013, politically-connected groups like the wind industry are getting special tax treatment. Even though Americans continue to struggle in the down economy, the federal government keeps giving its favorite industries a leg-up, and it’s showing no sign of stopping.
What happened? While Senate Minority Leader Mitch McConnell and Vice President Joe Biden were negotiating a last-minute deal, there was a flurry of lobbying activity from the wind industry. As Tim Carney recently highlighted in the Washington Examiner, this included “Obama’s closest corporate confidants as well as former congressmen from both parties.” They have a strong financial incentive to convince their pals in Congress to keep the playing field tilted in their and their clients’ favor.
We’re seeing history repeat itself. Congress has voted to extend the PTC six times since it began in 1992, usually in one or two-year intervals. Eleven months from now, right before the PTC is scheduled to expire again, I predict we’ll be engaged in the exact same debate. The wind lobby will still claim that the industry needs even more time to get off its feet, and Americans for Prosperity and our coalition partners will continue to point out how destructive the tax credit is, in policy and in principle.
Calling for cutting corporate welfare makes for great sound bites on cable news stations, but unfortunately Washington lawmakers routinely fail to put these words into action. When considering targeted handouts individually, Congress end up extending the same old corporate welfare policies that clog the tax code. Congress’s latest actions on the wind production tax credit is a prime case in point.
We can’t reform our tax system if our elected officials don’t have the guts to stand up to special interests. If Congress won’t end corporate welfare for the wind industry, there’s little reason to believe that it will end it for any other industry. This does not bode well for comprehensive tax reform in 2013.
In closing, I’d like to extend a big thank you to all of the activists who sent a note to Congress urging them to let the wind production tax credit expire. It’s important to remind Congress that extending handouts to the wind industry is not why they were sent to Washington. AFP is proud of its leadership in opposing wind subsidies, and it won’t give up anytime soon.