By Zack Colman - 01/06/13 07:30 PM EST
Democrats are digging in against cuts to clean-energy research as lawmakers again face a deadline to replace billions of dollars in spending reductions from sequestration.
The “fiscal cliff” deal that lawmakers struck this week delayed the sequestered budget cuts until March, buying Congress a few more weeks to negotiate an agreement to stop them.
The stakes are high for the Energy Department (DOE), which would see its budget slashed 8.2 percent if sequestration were allowed to take effect.
Democrats are vowing to protect funding for clean-energy research in a sequestration deal, arguing the spending is critical for the environment and the country’s economic future. Democrats are also vowing to protect programs in DOE’s Office of Energy Efficiency and Renewable Energy (EERE).
“The air we breathe, the water we drink, the energy we generate and the environment in which we live should not be compromised by funding cuts now, or ever,” Rep. Mike Honda (D-Calif.) told The Hill in a statement. “There is bloated government spending that must be cut, but this is not the place for it, not when the sustainability of our people and our planet is at stake.”
But Republicans say many of the clean-energy programs — particularly the loans and grants that are designed to bring technology to market faster — are wasteful meddling in the marketplace that should be scrapped.
Rep. Mike Pompeo (R-Kan.), a second-term lawmaker who opposes energy credits, said he believes Congress “can get rid of a big swath” of energy subsidies.
“I’ve spent the first two years in Congress talking about these market distortions,” Pompeo told The Hill. “This is the stuff that five years ago wasn’t even talked about. I think we’ve made a lot of progress in getting awareness.”
The battle to stop sequestration is being wrapped into the fight over a debt-ceiling increase, which will likely be needed in March. Republicans are calling for a massive package of spending cuts in return for an increase in the federal borrowing limit.
House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) said his committee would focus on finding savings in the energy budget to pair with an increase in the debt ceiling, though he didn’t specify which programs.
"Every agency and program will be viewed with an eye toward savings — and spending cuts and significant reforms will be part and parcel of any debt-ceiling extension,” Upton told The Hill in a statement.
Some Democrats are hopeful that the two-month delay in sequestration will give lawmakers time to craft a package that includes not only spending reductions, but also tax increases.
“I will do everything possible to end the political brinksmanship and work for bipartisan tax, budget and Medicare reforms that create good-paying American jobs and protect the Medicare guarantee while holding down healthcare costs,” Sen. Ron Wyden (D-Ore.), who chairs the Senate Committee on Energy and Natural Resources, said in a statement.
The 46-member House Democratic Sustainable Energy and Environment Coalition said Congress should consider ending oil-and-gas tax incentives to cover some of the cost of reversing sequestration.
"As members dedicated to clean energy and environmental protection, we will work to make sure that Congress develops a balanced approach that doesn't just focus on cutting these vital programs. One solution includes repealing subsidies for big oil and gas, which would raise an estimated $41 billion over 10 years,” the caucus said in a statement to The Hill.
While many Republicans reject ending the oil-and-gas industry’s tax deductions — which are used by a multitude of industries — some appear willing to discuss closing a few of the industry's loopholes.
Robert Dillon, spokesman for Energy and Natural Resources ranking member Lisa Murkowksi (R-Alaska), said the senator would be willing to have that discussion so long as Democrats are willing to make sacrifices.
“Let’s recognize the Democrats are going after oil and gas tax credits because they think it’s a political talking point and a winner for them. We’re willing to look at them if it’s done in a rational, serious way, but that’s not been the case the past few years,” Dillon told The Hill.
A “serious” approach should include eliminating subsidies that encourage deployment of clean-energy technology, such as a wind power credit renewed in the “fiscal cliff” bargain, Dillon said.
GOP lawmakers also would likely seek to zero out, or sharply reduce, federal stimulus-style research spending that helped firms commercialize technology. Republicans would prefer to prioritize basic research funding to help generate technological breakthroughs.
Nick Loris, a policy analyst with the conservative Heritage Foundation, said killing EERE would save $2.3 billion.
“It’s a huge amount to spend on technologies where we already have viable companies,” Loris said.
But Dorothy Coleman, vice president of tax and domestic economic policy with the National Association of Manufacturers, warned against cuts to federal research and development programs.
“You can’t just turn the switch back on,” Coleman said of letting research spending lapse. “You’re going to lose a lot of institutional knowledge and continuity. … There’s a real downside in the long term on innovation and R&D.”
Rob Mosher, legislative director with the Alliance to Save Energy, said he thinks DOE’s research budget could be vulnerable in the spending talks to come.
Mosher said research funding, as well as EERE programs such as building energy codes, federal energy management and the weatherization assistance program, are likely to be targets.
“These programs have demonstrated significant value over many years and we would like to see investment to these programs maintained. But we recognize, with the ongoing push for austerity measures, it will be a challenge,” Mosher told The Hill.