Pompeo and Labrador miss mark with subsidy bill

The call for an end to all energy subsidies from Congressmen Mike Pompeo (R-Kans.) and Raul Labrador (R-Idaho) could be a laudable goal if it treated all energy resources fairly and treated energy fairly relative to other sectors. Unfortunately, their proposed legislation doesn’t work that way. It unfairly singles out wind power, the most promising source of new American manufacturing jobs, while protecting billions of dollars in incentives for other energy sources and all non-energy sectors. Honest reform of tax incentives must start with a level playing field. The Pompeo-Ladrador proposal fails to do that.

Further, as the Idaho Stateman newspaper pointed out in a recent editorial, the Pompeo-Labrador proposal would not reduce the federal deficit: "[T]he savings would be plowed back into across-the-board reductions in the corporate tax — leaving the country no closer to erasing its debt."

In the absence of that level playing field and truly free energy markets, leaders like Kansas Gov. Sam Brownback (R) and Iowa Gov. Terry E. Branstad (R), both of whom hale from windy states and strongly support extending wind’s primary incentive, the Production Tax Credit (PTC), provide a real-world take on the value of wind energy. According to Gov. Brownback, “Experience has taught us that investment in the renewable-energy economy is creating jobs across all employment sectors, including construction, engineering, operations, technology and professional services, in both rural and urban communities.”

All across the windy red states of America’s heartland, and in manufacturing regions as well, wind power is showing its ability to generate energy to power our economy and create the new manufacturing jobs that economy urgently needs.

Wind farm is proving itself as a commercial energy source, having accounted for more than a third of all of the new electric generating capacity installed in the past four years. Its incentive, a tax credit, has leveraged an average of $17 billion a year in private investment over the last four years. Meanwhile it has become one of the fastest-growing U.S. manufacturing sectors. Since 2005, domestic production of wind turbines components has grown 12-fold, and now includes more than 400 facilities in 43 states, "insourcing" manufacturing jobs from overseas back to the U.S. At the same time, wind power helps hard-pressed rural economies. Farmers and ranchers are paid up to $120,000 over 20 years for each turbine their property hosts, and rural counties are seeing new property tax revenues to help balance their budgets.

Taxpayers will lose their investment in creating this new industry if we tax it out of existence. This simple fact is well understood by 23 Republican and Democratic Governors and such business-friendly groups as the National Association of Manufacturers and Edison Electric Institute, all of whom have joined in supporting an extension of the wind energy Production Tax Credit.

Or, as the Idaho Statesman put it, "America needs a more streamlined, user-friendly tax code. America also needs a cleaner, more diverse energy portfolio — now. Labrador has signed onto a bill that targets the wrong section of the tax code, at the wrong time."

Tom Gray, www.awea.org/