Republicans dropping like flies from new Soros subsidy bet

In today’s Washington, both parties espouse reining in out-of-control spending, earmarks, crony capitalism and corporate welfare. Even once-sacrosanct ethanol subsidy schemes are teetering on the chopping block.

But even as public disgust over subsidy boondoggles mounts, a bipartisan group of lawmakers is flirting with cramming through a new black hole of energy subsidies. Their project is H.R. 1380, absurdly titled “the NAT GAS Act.” If enacted, it would represent our fourth ethanol-style boondoggle, along with corn ethanol subsidies, solar subsidies, and wind subsidies.

The bill promises a tax credit of up to 80% of the price of a natural gas vehicle, from $8,000 for passenger cars up to $64,000 for heavy trucks. As if the current $7,500 tax credit from the rest of us to underwrite a middle-class curbside bauble, the $41,000 “green” Volt version of Government Motors’s $16,000 Cruze, wasn’t offensive enough.

H.R. 1380 is estimated to cost taxpayers between $5 billion and $9 billion over five years. Leading supporter T. Boone Pickens cynically pitches his project by arguing that if we don’t like it after five years, we can just let it expire. Kind of like the wind tax credit, which expires every three years or so, only to be reinstated because we can’t “kill jobs” — not even the phony, bubble kind. Not after constituencies have been created demanding to be fed.

Some things die hard in Washington, even now that there’s a new class of nominal reformers in the majority of the House, which was where promoters of this new subsidy scheme started. H.R. 1380, which was introduced on April 6, garnered about 180 co-sponsors almost immediately. Over 80 Republicans supported the bill, and its champion was Tea Party stalwart John Sullivan, who’s from Pickens’s backyard of Oklahoma.

If it passes the House, this measure would be sure to pass the Democrat Senate and then get signed into law by President Obama — or at minimum be used to hold hostage some item Republicans really want.

It gets worse. Although Pickens is the most visible champion of the bill, in the past couple of weeks it’s come to light that this is actually a major new play of none other than George Soros. Soros is of course known for going long or short on bets that fit with the plans of his many other activities designed to influence government and remake the world into something more in line with his left-wing views.

As stock-watcher GuruFocus wrote in “Stocks that George Soros Keeps Buying,” Soros has accumulated 5.5 million shares in something called Westport Innovations Inc. (WPRT).

GuruFocus noted Soros “added his positions in the Dec. 31, 2010 quarter by 38.98%, again in the Mar. 31, 2011 quarter by 22.56%. Soros bought a massive 1.8 million shares at the early of 2010, and he has been buying ever since . . . and his holdings has [sic] steadily and interestingly increased by 1 million every quarter, this is a stock that should be looked more closely and for understanding why he has so much confidence in this stock. No other guru but one currently has any shares of this stock and that guru only owns 280,000 shares not 5.5 million.”

Answering this question somewhat, StreetInsider.com’s latest missive reads, “Westport (WPRT) Set to Explode Upon Passage of Nat Gas Act — [CNBC’s Jim] Cramer.”

So it’s little wonder that Republicans are beginning to abandon the bill as word gets around about what’s being perpetrated, in part under their name.

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  • johno413

    I’m no fan of Soros, but what might the outcome be if DC ran the “will George Soros benefit?” test on every piece of legislation? It’s is only a hunch, but I think it would be a safe bet that any stock one would call “green” or “clean” has Soros tentacles in it to some degree or another.

    For me the bigger problem is that in this climate DC still reflexively wants to impact the market and certain technology with such massive incentives. It would be one thing to give a “nudge”, say in the form of finding a niche to kick-start such as postal vehicles, but $9 billion in this era is massive. Even that large an amount doesn’t completely solve the chicken and egg problem, as a poster suggests. Changing the transportation infrastructure is a gargantuan task, and this bill seems like a weak-kneed effort aimed as much as special interests as towards being a solution.

  • Sproing

    George Fenermost:

    The argument that you put forward for additional government subsidies is a false one. The gasoline powered automobile (diesel as well) became common place well before there were gas stations on every corner, and the light bulb came along well before cities or homes were wired for its use.

    Innovation of a truly meaningful kind makes its own markets simply because people see the benefits from it’s adoption and not simply because some legislative body commands it Oil came along to replace coal at a time when coal appeared to be getting scarce based on then available technology. It was also cleaner, easier and cheaper to get, and much safer as well.

    The historical record seems to show quite clearly that the drive and ability to create new things is only slightly dependent upon government expenditures of taxpayer monies and more heavily dependent upon individual inspiration and curiosity.

  • George Fenermost

    Imported oil pays for terrorism. I thought that was pretty obvious after 9/11.
    Our country needs to wean itself from terrorist empowering fuels sources to safe domestic energy.

    Natural gas is abundant in the US and it is more than capable of powering vehicles. However, there is a chicken and egg problem–CNG cars and trucks are useless without CNG filling stations. CNG filling stations can’t make money without a critical mass of CNG vehicles. The NAT GAS ACT is designed to solve this issue by subsidizing both for 5 years. Solving a chicken and egg problem such as this is a fair and reasonable role for the government. The market cannot solve this problem fast enough.

    Eliminate terrorist funding is urgent. We could eliminate ethanol or other subsidies to pay for it but we cannot continue to send billions of dollars a month to hostile countries intent on the destruction of our nation.

    If reluctant Republicans have a better idea for reducing oil imports, let’s hear it. If not, they need to stop standing with the terrorists on this issue and stand up to protect our troops and citizens.

    • effinayright

      “Eliminate terrorist funding is urgent. We could eliminate ethanol or other subsidies to pay for it but we cannot continue to send billions of dollars a month to hostile countries intent on the destruction of our nation.”

      Erm…. aside from Venezuela, would you like to name the “hostile [oil exporting] countries intent on the destruction of our nation”? Why would Saudi Arabia seek our destruction, since they would face the loss of our oil revenues? Why wouldn’t Saudi Arabia, if they really were intent on our destruction, simply stop sending us oil and cripple our economy?

      As for “terrorist funding” : since 9/11, just how effective has that been?

      Methinks I detect a shill for Natural Gas infrastructure subsidies.

      • Waxingeuphoric

        Nice post.
        Top 5 countries US imports oil from (in order)- For Georges info
        Saudi Arabia

        • FactsCount

          And the bottom 3 are significant sources of anti-american sentiment.

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