President Obama used the backdrop of an Iowa wind-energy manufacturing plant Thursday to ramp up pressure on Congress to extend an expiring tax break that has been vital to financing new power projects.
Extension of the wind-energy production tax credit — which is slated to lapse at year’s end — is part of a short “to do list” of actions Obama says Congress could do quickly to help the economy.
“So we’re making progress. But I’m here today because that progress is in jeopardy,” Obama said at the plant in Newton, Iowa, that makes wind turbine blades.
“If Congress doesn’t act, those tax credits I mentioned — the ones that helped to build up the wind industry and bring it here to Newton — will expire. If Congress doesn’t act, companies like this one will take a hit. Jobs will be lost. That’s not a guess. That's a fact. And we can't let that happen,” Obama said, according to his prepared remarks.
“That’s a fact. And we can’t let that happen. We can’t walk away from these jobs. Congress should extend these tax credits, and they should do it now,” he added in the speech that noted Iowa supports more wind power jobs than any other state.
The wind power industry and supply-chain companies are lobbying hard for an extension of the credits, arguing that uncertainty about the incentives is already hurting the sector and that some layoffs have begun.
“Wind projects typically have an 18- to 24-month development cycle. So effectively the PTC is already expiring,” said Denise Bode, CEO of the American Wind Energy Association, a trade group, in a statement this week. “That is why an extension is urgently needed now. We can’t afford to wait until the [production tax credit] runs out.”
But the fate of the credits — which have not lapsed since 2004 — remain highly unclear this year. The credits are tethered to wider election-year tax policy and reform debates that could drag any action past the 2012 elections, or even into next year.
House Republicans have promised wide-ranging examination of expiring tax policy provisions, while Senate Democrats have pressed for an across-the-board extension of a suite of expiring provisions.
Also, while the wind credits have long enjoyed bipartisan support, many Republicans are increasingly criticizing federal green energy programs.
Sen. Chuck Grassley (R-Iowa), who has floated legislation to extend the credit, issued a statement ahead of Obama’s speech alleging the White House must engage more with Congress on various expiring tax provisions.
“The provision is hung up in the lack of a way forward on dozens of expiring tax provisions. The President could exert his leadership by working with Congress on a way forward instead of calling for a provision that’s a no-brainer for many of us. He’s focusing on the easy part of a bigger task,” Grassley said Wednesday.
Separately, the White House is pushing for another round of the 30 percent credit for manufacturing equipment like solar panel components and wind turbines.
The 2009 stimulus law provided $2.3 billion in tax credits for the program, but efforts in Congress to add billions to that cap have fallen short in recent years. The White House has proposed adding another $5 billion worth of credits.
Obama used the speech to tout the other items on the "to-do list," such as eliminating tax incentives for companies that outsource jobs.
"There are plenty of steps we can take — steps that we must take right now — to speed up this recovery; to help create jobs; and to restore some of the financial security that so many families have lost. It’s within our control to do all of that right now," Obama said. "But here’s the thing: too many of my Republican friends in Congress are standing in the way."
He also alleged that Republicans are pursuing policies that won’t help the economy.
“They want to cut more taxes — especially for the wealthiest Americans. They want to cut back more of the rules we put in place for banks and financial institutions. They want to wait for the housing market to hit bottom, and just hope for the best,” Obama said, according to his prepared remarks. “That doesn’t make sense.”
—Bernie Becker contributed to this story