Fate of renewable power grants in tax package unclear

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The issue is bubbling below the surface of the political battle over extension of Bush-era income tax cuts. Obama announced a tentative deal with Republicans on Monday, but congressional Democrats are balking.

At a caucus meeting of Senate Democrats Tuesday, Sen. Maria Cantwell (D-Wash.) raised the issue of the Treasury Department grants, also commonly known as the Section 1603 program, though no final decisions were made.

Sen. Dianne Feinstein (D-Calif.), who along with Cantwell and 24 other Democrats called for a two-year extension of the grant program late last month, told reporters at the Capitol she planned to compile a list of renewable energy projects “that will not go ahead” if the grant program is not extended.

Asked if there is potential to add the extension into the package, Feinstein said, “I don’t know. We’ll have to look at that.”

Environmentalists are already mobilizing to push for inclusion of the grant program in the tax package. (In fact, one well-known environmental lobbyist was spotted in the Capitol Tuesday.)

The American Wind Energy Association, the wind industry's trade group, sent out what it called a “special alert” concerning the “tens of thousands of American jobs” they said could be affected if the grant program is not extended.

“We have people being laid off right now, and we expect to see more without fast action on the tax extenders now being negotiated,” AWEA CEO Denise Bode said in the alert. “The 1603 tax credit extension would help bring them back as soon as possible.”

Ben Geman contributed.