US Chamber of Commerce opposes cuts to vehicle manufacturing program

By Vicki Needham - 09/22/11 11:04 AM ET

The U.S. Chamber of Commerce opposes cuts to a vehicle manufacturing program, which has been suggested as a way to pay for a boost in federal disaster aid.

The Chamber's Bruce Josten, head of government affairs, sent a letter to senators on Thursday urging them as they consider spending cuts to look at the benefits of the Advanced Technology Vehicle Manufacturing (ATVM) loan program they argue helps the manufacturing sector.

“Again, while the Chamber understands the importance of reducing America’s unacceptable debt and believes that all programs must be on the table, the Chamber urges you to bear in mind the facts about the ATVM loan program, which promotes manufacturing in the U.S. and is an important component of America’s energy security,” Josten wrote.

Josten noted that the Chamber "strongly supports disaster relief funding to assist victims of natural disasters" but not at the expense of the program.

"The Chamber is also a vocal proponent of fiscal responsibility and recognizes that Congress must make difficult but necessary choices among competing priorities," he said.

The House rejected a $1.043 trillion continuing resolution on Wednesday night that included $1.5 billion in cuts to the ATVM program in order to provide another $1 billion to the Federal Emergency Management Agency (FEMA) this year, to pay for a rash of flooding, fires and storms that have wrecked havoc across the nation.

House Republican leaders — who lost the votes of 48 conservative members of their own party and nearly all Democrats — will have several issues to weigh, especially as the Senate bears down on increasing disaster aid levels without any offsets.

The Chamber said the ATVM loan program, authorized in the Energy Independence and Security Act of 2007, was supported by Republicans and Democrats as an important step in reducing America’s dependence on oil from unstable regimes.

Second, ATVM loans, which will be repaid with interest, provide incentives for automakers and suppliers to build more fuel-efficient advanced technology vehicles in the United States, providing new opportunities for workers in a sector of the economy that has led the nation’s recovery.

Lastly, it isn't the industry's fault that the Energy Department hasn't used the funds appropriated by Congress. Loan applicants have been waiting in line for several years while the Obama administration to complete its due diligence, Josten said.

Democrats argued against cutting that program as well as an offset to disaster aid spending, which they say should be treated as emergency spending.

"The Advanced Technology Vehicle Manufacturing program was started in 2008 to reinvigorate American manufacturing," said House Appropriations Committee Ranking Member Norm Dicks (D-Wash.). "To date, this program has awarded $3.5 billion of credit subsidy to promote energy-efficient advanced vehicles and their component parts."

"The Department of Energy estimates the loan guarantees have created or maintained in total 39,000 jobs in California, Delaware, Illinois, Indiana, Kentucky, Ohio, Michigan, Missouri and Tennessee," Dicks said.