$48 billion For Green Energy In Obama’s 2016 Budget
President Obama’s budget proposal for 2016 asks Congress for $4 trillion, including about $48 billion in tax incentives over the next decade for various green energy programs.
“In order to secure America’s energy future and protect our children from the impacts of climate change, the budget invests in clean energy, improving energy security, and enhancing preparedness and resilience to climate change,” according to a White House fact sheet on the 2016 budget proposal.
Obama’s plan to incentivize green energy production, expanded use of energy efficiency measures, investments in carbon capture technology, advanced energy manufacturing and producing biofuels will increase the budget deficit $42.5 billion by 2025. Obama’s budget also includes subsidies for building alternative fuel vehicles and energy efficient homes that will increase the deficit by $5.8 billion over the next decade.
It’s part of the administration’s $185 billion plan to incentivize domestic manufacturing, research and green energy use.
“These investments support the President’s Climate Action Plan, helping to expand American leadership in the clean energy economy with new businesses, jobs, and opportunities for American workers,” the White House said.
The costliest green energy provision in the budget is a proposal to make permanent tax credits for producing electricity from wind and solar energy sources. Permanently extending these subsidies would cost $31.5 billion over the next decade. Most Republicans, however, have opposed extending such green energy tax credits.
The wind industry in particular has lobbied heavily for extending the Wind Production Tax Credit — a tax subsidy that pays wind power producers $23 for each megawatt hour of electricity produced for 10 years. The wind PTC has been a major source of growth for the wind industry, who has warned that allowing the credit to expire will hurt job growth.
But lawmakers allowed the wind PTC to lapse at the end of last year, which has given Obama an opening to appease wind producers and once again propose making green energy tax credits permanent.
“To compete in the 21st Century economy and make America a magnet for job creation and opportunity, we need to invest in American innovation, strengthening our manufacturing base, keeping our Nation at the forefront of technological advancement, and leading in the development of clean energy alternatives and the promotion of energy efficiency while moving toward energy security through safe and responsible domestic energy production,” the White House said.
The Obama administration plans to partially offset these costs by eliminating $50 billion in tax preferences for fossil fuel companies over the next decade. Obama’s tax proposal repeals things like write-offs for intangible drilling costs and manufacturing tax credits for producing coal. The White House is also taking aim at closing other tax “loopholes” that will further increase costs for petroleum and coal companies.
“Historically, raising taxes on energy raises costs for consumers,” said Jack Gerard, president of the American Petroleum Institute. “We create well-paying jobs, build infrastructure with private dollars, generate billions of dollars in government revenue, support retirees, and help businesses grow with affordable and reliable energy. This industry is the poster child for middle class economics.”
Obama has been calling on increasing taxes on oil and natural gas companies since at least the 2012 election. In his race against Republican candidate Mitt Romney, Obama said he would get rid of $4 billion in tax benefits enjoyed annually by oil and gas companies.
“The president’s annual call to raise taxes on U.S. oil and natural gas development would hurt job creation, infrastructure investment, the federal deficit, seniors on fixed incomes and domestic manufacturing,” Gerard said.
Congressional Budget Office data, however, shows that green energy programs get most of the energy-related tax benefits on the books.
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