Monday, May 7, 2012
Today's Wall Street Journal disses Windy Republicans.
The following article appeared today in The Wall Street Journal, Review & Outlook section:
The GOP swept Congressional elections in 2010 promising to end President Obama's $800 billion stimulus and stop industry bailouts. Too bad nobody told that to Iowa Republican Steve King and his colleague Dave Reichert of Washington.
The duo held a press conference last week singing the praises of wind power and urging an extension of the federal Production Tax Credit (PTC) for renewable energy, which is scheduled to end in January. The green-energy lobby probably can't believe its luck.
The $1.2 billion a year PTC was created as a temporary boost for green energy in 1992. It offers a 2.1 cent per kilowatt hour tax write-off for wind energy production that effectively exempts much of the industry from federal income tax. By contrast, the oil and gas companies whose tax rates Mr. Obama keeps complaining about pay some $26 billion a year in federal and state corporate income taxes.
Now the PTC is scheduled to expire, and the industry is launching a lobbying blitz to extend it for another four years. Several GOP Governors are already on board, including South Dakota's Dennis Daugaard, who also wants an investment tax credit for wind.
Enter Congressmen Reichert and King. Mr. Reichert is co-sponsoring legislation to extend the PTC because the subsidies "reduce electricity costs and create jobs." As for Mr. King, who likes to advertise himself as a principled conservative, his line is that "Iowa is a wind energy success story" that only needs the federal government to "provide stable, low tax rates."
Where have we heard that one before? Every industry says it wants low, stable tax rates. But one reason tax rates are high and the tax code is such a mess is because of special-interest carve-outs, which allow politically connected industries to avoid the taxes that others pay.
The wind lobby is now predicting a catastrophic loss of jobs if the PTC expires, but that is because the tax subsidy has sustained the industry on a scale that wouldn't have been possible if it had to follow the same rules as everyone else.
The lobby's spin is that wind power needs one last push to become economically sustainable. They've been saying that since the Bee Gees were cool and Jimmy Carter was President. But it isn't the 1970s any more, even if Messrs. Reichert and King want to stick the rest of us with a 1970s energy policy.
The vote on the PTC will be a big moment for the GOP. One reason the party lost its way in the Bush years is that it became a vehicle for special business pleading instead of free markets. If the party is serious about tax reform, deficit reduction and ending corporate welfare, then it will vote to take wind power off the taxpayer dole. Americans didn't give Republicans control of the House so the spirit of Tom DeLay and Nancy Pelosi could ride again.