The lame-duck Congress that will meet after the Nov. 4 election could lay a few golden eggs that will hatch into a new flock of crony capitalist ducklings. The gold would actually come from taxpayers. The politically well-connected are especially eager about an $18 billion giveaway to wind farms, a tax credit that benefits mostly millionaires and billionaires.
That program often enriches benefactors of leftist groups, but others have jumped on the money bandwagon, too. The U.S. Chamber of Commerce is said to be ready to push the wind power subsidies when Congress reconvenes after the election. Supporters want to avoid leaving the decisions to be made by more conservative lawmakers taking office in January.
The “temporary” tax credit for turning wind into electricity was supposed to be a 5-year incentive when it was created in 1992. Eight extensions have kept its blades turning since then, until the credit finally expired on Dec. 31, 2013. Now the push is on to renew it retroactively for five more years, costing the Treasury $18 billion.
Wind-generated energy is fine so long as it competes evenly with other power sources. But the subsidy of $23 per megawatt produced gives wind an unfair advantage, especially when coupled with laws requiring electric utilities to buy wind power. That lets producers dictate premium prices. Wind is now one of the costliest electricity sources, often costing five times or more the cost of generating electricity with fossil fuels, hydroelectric or nuclear sources.
Taxpayers pay twice — once for the subsidy and a second time through their jacked-up electric bills. One federal report found that states using the most wind energy see their electric rates skyrocketing four times faster than the national average.
When the law dictates that wind power must be used, it forces everyone to buy the most expensive type of energy. That includes seniors on fixed incomes. It’s like being told that you cannot purchase meat at a grocery unless you also buy T-bone steak and filet mignon. Buying only affordable chicken, hamburger or cold cuts is taboo.
The industry knows it is hooked on government subsidies and is uncompetitive without them. The American Wind Energy Association reports that new projects came to a standstill when the subsidy expired at the end of 2013, excepting those grandfathered in by regulation to qualify for the old subsidy.
Wind energy investor deluxe Warren Buffett explained it this way: “We get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”
So who wants to revive this $18 billion giveaway?
President Obama, whose coziness with wind and solar crony capitalists has brought him untold millions in campaign cash, for one. A majority of U.S. senators, led by Senate Finance Committee Chairman Ron Wyden, Oregon Democrat, for another. Mr. Wyden added the wind energy production tax credit (PTC) to the Senate tax legislation scheduled for the lame-duck Congress.
Business groups like the U.S. Chamber, which exalt subsidies over free-enterprise principles, is also on board.
And who can stop it? The U.S. House, if GOP leaders will stand fast and refuse to make any deal or compromise that includes the poison pill of the wind PTC.
Will the House stop it? Part of the problem in fighting corporate cronyism are the Republicans who go along with whatever will shield them from making tough decisions. If the giveaway happens while Harry Reid runs the Senate, they can roll over and let it happen, but then blame Democrats.
Senate Republican leader Mitch McConnell, who expects to be majority leader in 2015 if Republicans win big in November, says he wants to begin January with a clean slate. That’s another way of saying that Mr. Reid and the liberals should get their way in the lame-duck session, to avoid tough decisions if and when the GOP runs the Senate.
Things happen fast in a lame-duck Congress, which is why voters needs to contact Congress now, not later. The message is to stand fast against crony capitalism, opposing any legislation that extends the wind PTC.
Fortunately there are stalwart members, including more than 50 lawmakers who have committed to oppose any effort to revive this $18 billion giveaway. Crony capitalists need to be told: Don’t count your lame ducklings before they hatch.