What happens when the preferences of the economic base meet the preferences of the ideological base?
Mitt Romney was in Colorado yesterday, where some people aren’t too pleased with him. This week he came out in opposition to an extension of the wind-power production tax credit (PTC), which is set to expire at the end of the year. The tax credit helps make wind power competitive and is credited with enabling the creation of thousands of jobs in manufacturing and construction. This is almost certainly not going to be a huge issue in the campaign, but it does reveal some interesting things about where Romney is vis-a-vis the Republican Party. On one side, you have the parochial economic interests of many Republican members of Congress and some very well-heeled Republican economic constituency. On the other, you have the purely knee-jerk reaction of Tea Party types to anything hippies might like. Guess where Mitt comes down?
Yesterday, the Senate Finance Committee passed an extension of the credit with bipartisan support. The PTC has support from members of Congress from both parties who have wind projects in their states, and a number of prominent Republicans like Chuck Grassley have urged Romney to change his position. There are thousands of jobs at stake; as Phyllis Cuttino of the Pew Clean Energey Program writes, “This uncertainty has put off investors and led to boom-and-bust cycles in the industry: Wind installations have declined by 73 to 93 percent in years without a PTC. Because of the long timelines (wind projects can take nine to 16 months from groundbreaking to power generation), investors seeking new wind projects must look two to three years into the future to decide whether the costs and benefits warrant investment. As we’ve seen in the past, investors are wary of supporting new projects if the availability of the tax credit is uncertain.” That brings up a peculiar footnote to this issue: Some of the biggest beneficiaries of this tax break are banks like Goldman Sachs, which is investing heavily in clean energy and so has a substantial stake in the PTC being renewed.
But when the issue came up, Mitt Romney’s spidey-sense, with which he tunes into every whim and grunt from Republican-base voters, began to tingle. Let’s dispense with the idea that anyone on either side has a principled position on these kind of tax credits that they hold to irrespective of the activity that the tax credit supports. In the case of liberals, there’s no hypocrisy involved: We’ll freely admit that there are some things government should support, and in a case like renewable energy, some of these industries need a boost in their early stages in order to become competitive. Part of government’s job is to create the conditions where the market can operate freely, efficiently, and justly. All of us (well, most of us) would agree that if we got all our energy from renewables and that energy was affordable, that would be better than our current situation, in which most of our energy comes from sources that have substantial environmental costs in both their extraction and their use. The question is what we’re willing to do in order to approach that better world, and liberals believe that some tax credits for renewables are a perfectly reasonable part of the price. We also assume that these tax credits are finite and that as the industry matures they can be phased out.
Conservatives, on the other hand, claim that they believe in the free market and that industries should rise or fall on their own merits without any help from government. But in practice, their opinions on particular cases show no adherence to this principle they allegedly hold. Instead, they favor tax credits for industries they like for one reason or another and oppose them for industries they don’t like. In the past few years, opinions on energy have become one more culture-war marker for conservatives, with people gleefully chanting “Drill baby drill!” at Republican rallies and leaders like Rush Limbaugh waging holy war against electric cars, for no particular reason other than liberals like renewable energy, and they hate liberals. So Mitt Romney is perfectly happy to maintain subsidies for the oil industry but opposes subsidies for the wind-power industry. There isn’t some fundamental principle about the relationship of industry and government at work here. He’s just channeling the opinions of his party, as always.
For a long time, it seemed that whenever there was a direct conflict between the preferences of the GOP’s economic base and its grassroots ideological base, preference went to the economic base. Those conflicts were rare—part of the great trick the economic base pulled was convincing the grassroots base that if Jesus returned tomorrow, he’d favor cutting the capital gains tax. I doubt Romney feels particularly strongly about this. But his default impulse, at least for the moment, is to do whatever he thinks the most extreme Tea Partier would prefer. As I said yesterday, it’s almost as though he doesn’t realize the primaries are over.
By: Paul Waldman, Contributing Editor, The American Prospect, August 3, 2012
On Thursday, Mitt Romney campaigned at the headquarters of Solyndra — the first renewable energy company to receive a federal loan under the stimulus — and reiterated his debunked claims that its bankruptcy symbolized the corruption and cronyism of the Obama administration. But just one day later, a solar panel developer “that landed a state loan from Mitt Romney when he was Massachusetts governor” went belly up, the Boston Herald reports, creating an inconvenient storyline for the GOP presidential nominee.
The company, Konarka Technologies, “filed for Chapter 7 bankruptcy protection and will cease operations, lay off its 85 workers and liquidate”:
“Konarka has been unable to obtain additional financing, and given its current financial condition, it is unable to continue operations,” CEO Howard Berke said in a statement. “This is a tragedy for Konarka’s shareholders and employees and for the development of alternative energy in the United States.”
The demise of Konarka could become a hot topic on the campaign trail because Romney personally doled out a $1.5 million renewable energy subsidy to the Lowell startup in 2003, shortly after taking office on Beacon Hill.
Konarka is the second Massachusetts solar company, along with Evergreen Solar and Beacon Power, to receive taxpayer dollars under Romney’s tenure and subsequently declare bankruptcy.
Romney, meanwhile, routinely dismisses the nation’s 3.1 million clean energy jobs, even as clean energy is booming in Massachusetts. The industry has created 64,000 jobs across the energy efficiency and renewable energy sectors.
By: Igor Volsky, Think Progress, June 2, 2012
Gov. Paul LePage wants three million acres of North Woods forests opened to development. Weeks after he was sworn in as governor of Maine, Paul LePage, a Tea Party favorite, announced a 63-point plan to cut environmental regulations, including opening three million acres of the North Woods for development and suspending a law meant to monitor toxic chemicals that could be found in children’s products. Mr. LePage said workers’ and businesses’ interests should be defended “with the same vigor that we defend tree frogs.”
Another Tea Party ally, Gov. Rick Scott of Florida, has proposed eliminating millions of dollars in annual outlays for land conservation as well as cutting to $17 million the $50 million allocated in last year’s budget for the restoration of the dwindling Everglades.
And in North Carolina, where Republicans won control of both houses of the Legislature for the first time in 140 years, leaders recently proposed a budget that would cut operating funds to the state’s Department of Environment and Natural Resources by 22 percent.
In the past month, the nation’s focus has been on the budget battle in Washington, where Republicans in Congress aligned with the Tea Party have fought hard for rollbacks to the Environmental Protection Agency, clean air and water regulations, renewable energy and other conservation programs. But similar efforts to make historically large cuts to environmental programs are also in play at the state level as legislatures and governors take aim at conservation and regulations they see as too burdensome to business interests.
Governor LePage summed up the animus while defending his program in a radio address. “Maine’s working families and small businesses are endangered,” he said. “It is time we start defending the interests of those who want to work and invest in Maine with the same vigor that we defend tree frogs and Canadian lynx.”
When Republicans wrested control across the country last November, they made clear that reducing all government was important, but that cutting environmental regulations was a particular priority. Almost all state environmental budgets have been in decline since the start of the recession, said R. Steven Brown, executive director of the Environmental Council of the States, which works with environmental agencies across the country. What has changed this budget season is the scope and ambition of the proposed cuts and the plans to dismantle the regulatory systems, say advocates who are already battle-hardened. “Historically, we’ve taken pride in being a leader in environmental quality in the Southeast,” said Molly Diggins of North Carolina, director of the state chapter of the Sierra Club. “But there is now such fervor to reduce the size of the environmental agency. The atmosphere is the most vitriolic it’s ever been.”
David Guest, the managing attorney for the Florida office of Earthjustice, a national environmental law firm, said Governor Scott’s budget was “the most radical anti-environmental budget” he had seen in two decades of environmental work. Comparing Mr. Scott’s proposed changes with those of Florida’s previous Republican governors, including Jeb Bush, he called them “a whole new world.”
The strategies have been similar across the affected states: cut budgets and personnel at regulatory agencies, prevent the issuing of new regulations, roll back land conservation and, if possible, eliminate planning boards that monitor, restrict or permit building development.
In New Jersey, for example, Gov. Chris Christie, another favorite among Tea Party loyalists, has said the Highlands Water Protection and Planning Act, which preserves more than 800,000 acres of open land that supplies drinking water to more than half of New Jersey’s residents, is an infringement on property rights. Mr. Christie has moved to shift power from planning boards and government agencies to administrative judges, political appointees who, environmentalists say, tend to rule more often in favor of developers’ interests.
In Florida, Governor Scott has asked to cut staff members to 40 from 358 at the Department of Community Affairs, which regulates land use and was created to be a control on unchecked urban sprawl. Lane Wright, a spokesman for Governor Scott, said the cuts would enable businesses to grow again in Florida. The governor “does care about the environment,” Mr. Wright said, “but feels it is more important to get people back to work.”
In the first round of federal budget fights, Republicans appear to have won some of what they sought: $1.6 billion in cuts from the E.P.A. and $49 million from programs related to climate change. But they fell short in other areas. Daniel J. Weiss, director of climate strategy at the Center for American Progress, a liberal Washington policy group, said that by his calculation the Republicans had sought nearly $10 billion in cuts related to efficiency and renewable energy but got less than $3.7 billion. “The Democrats successfully defended investments in clean energy,” Mr. Weiss said.
The eventual outcome at the state level is much less clear. Florida and North Carolina’s budget battles are in the early stages. In New Jersey, where Governor Christie has been in office since 2010, he has held up stricter drinking water standards, saying he is waiting for further research by the E.P.A. And yet, in Maine, Governor LePage’s agenda has engendered such an angry response that the newly elected Republican majority in the State Legislature seems to be backpedaling from many of its strongest components. Mr. LePage’s proposal to open the woodlands has not yet been introduced as a bill. And this month the Legislature made a point of enacting a ban on a chemical detected in sippy cups. All but three legislators voted for it. (Mr. LePage has questioned whether the science is strong enough to support such a ban.) Adrienne Bennett, the governor’s press secretary, acknowledged that Mr. LePage had not gotten everything he wanted, but pointed to some victories. The governor just signed a law that will reduce restrictions for building on sand dunes, and his proposal to provide incentives to businesses to police themselves on a variety of environmental regulations is still in the Legislature. “‘We will continue to move forward,” Ms. Bennett said.
By: Leslie Kaufman, The New York Times, April 15, 2011