Washington’s penchant for brinksmanship has certainly benefited the wind energy industry. Whenever Congress faces a serious deadline, lobbyists for the wind energy industry are able to convince their friends on Capitol Hill to extend their main handout, the controversial wind production tax credit (PTC), in a last-minute backdoor deal.
Most recent was last December’s “CRomibus,” the trillion-dollar spending bill passed during lame duck session that averted federal government shutdown. Congress quietly included a 1-year retroactive extension into the package, at a cost of $13 billion over the next decade. The time before this was in early January 2013, when Congress approved a 1-year extension in the so-called “Fiscal Cliff” deal – another large “must-pass” bill, this one preventing an automatic, across-the-board income tax hike.
Congress can and should stop this cycle. Extending handouts squanders billions in taxpayer dollars and restricts Americans’ access to affordable and reliable energy. It distorts price signals, allowing wind producers to pay the electricity grid to take their power and still turn a profit. It consistently fails to deliver on its promises in terms of long-term job creation, or turning wind energy into an economically viable industry that can stand on its own two feet without permanent taxpayer support.
It’s no accident why special interests in the wind energy industry pursue these under-the-radar extensions — it’s because there’s waning support on Capitol Hill for wind subsidies. After over twenty years of extending these expensive taxpayer handouts, Congress is beginning to wake up to the problems of endlessly propping up wind energy using the tax code.
Earlier this year, Senator Heidi Heitkamp sponsored an amendment expressing the sense of the Senate that the PTC subsidy to the wind industry should once again be extended. It failed on a 47-51 vote. Later on the budget resolution, Senators Jeff Flake and Lamar Alexander submitted a competing measure that would put an end to Big Wind’s sweet-heart tax giveaway by repealing the recent retroactive extension approved last year. Theirs didn’t make it to the floor during vote-a-rama, but it’s believable that it would have met a better fate than the Heitkamp measure.
On House side, Representative Kenny Marchant recently introduced legislation that would close this special wind subsidy loophole in the U.S. tax code entirely going forward, and rein in the handout for current beneficiaries by tightening eligibility definitions and repealing the inflation adjustment for current PTC recipients. These changes will reduce the amount that American taxpayers are forced to subsidize wind companies by approximately 35 percent. The bill also includes a sense of Congress that the PTC should not be extended and should remain expired.
The PTC Elimination Act boasts an impressive list of cosponsors, including Majority Whip Steve Scalise, Republican Study Committee Chairman Bill Flores, and Transportation Committee Chair Bill Shuster. It also includes Representative Mike Pompeo, who has consistently championed ending wind energy subsidies through other legislation and Dear Colleague letters.
Americans for Prosperity applauds these members of Congress for their leadership on the issue of reining in wind energy subsidies, and we encourage their colleagues to follow. Lawmakers should reject efforts to extend this handout for special interests in the wind energy industry. We can’t solve our country’s energy and spending policies unless lawmakers are willing to cut corporate welfare that benefits special interests at the expense of American taxpayers.
Christine Harbin Hanson is national issue campaign manager for Americans for Prosperity