President Obama calls on Congress to act on Clean Energy Tax Credits in “To Do List”
NEWS RELEASE — Washington, D.C. – On Thursday, May 24, President Obama will visit a wind manufacturer in Newton, Iowa. Newton is a city of roughly 16,000 residents, located 35 miles east of Des Moines.
For many years, Maytag manufactured washers and dryers at its corporate headquarters in Newton, employing 3,500 at its peak. After being acquired by Whirlpool in 2006, plans were made to consolidate manufacturing into existing facilities, and the remaining 1,900 employees in Newton lost their jobs.
But because of the growth in the wind industry, much of it stimulated by the federal Production Tax Credit (PTC), TPI Composites – a leading global provider of composite wind blades to major turbine manufacturers – built a plant in Newton in 2008 and today employs more than 700 workers.
In Newton, the President will urge Congress to create secure American jobs and restore middle class security by acting on the “To Do List.” Specifically, the President will highlight the need to reduce our reliance on foreign oil and develop more secure domestic energy sources by investing in clean energy manufacturing.
He will call on Congress to pass legislation that will extend the PTC to support American jobs and manufacturing in the wind industry alongside an expansion of the 48C Advanced Energy Manufacturing Tax Credit that supports American-made clean energy manufacturing. According to industry estimates, the wind industry supports nearly 20,000 direct jobs along with over 30,000 manufacturing jobs in its supply chain. These credits have played an important role in fueling that job creation, and as a result have strong bipartisan support from Governors, Members of Congress, as well as industry.
Today, Deputy Assistant to the President for Energy and Climate Change, Heather Zichal; Deputy Assistant to the President and Deputy Director of the National Economic Council, Brian Deese; Secretary of Energy, Steven Chu; and Secretary of the Interior, Ken Salazar will meet with wind energy developers and supply chain manufacturers to discuss the value of the PTC and the 48C tax credits to a range of industries, companies, and communities, and how we want to work together to ensure they are passed.
Thanks in part to the Obama Administration’s investments in clean energy – the largest in American history – the United States has nearly doubled renewable energy generation from sources like wind and solar since the President took office. Generation from wind turbines has increased 27 percent in the last year alone, continuing a trend of rapid growth.
Not only have the Administration’s clean energy tax credits helped increase domestic production of clean energy, but they have supported a dramatic expansion of clean energy technologies made in the United States. By some estimates, today 60 percent of the wind turbines in the United States along with component parts that power them (like towers, blades, gears, ball bearings and electrical switches) are made here at home, more than doubling the 25 percent in 2005. Most importantly, that means more American jobs, across a number of sectors and at factories throughout the country. In fact, according to industry estimates, the tens of thousands of manufacturing jobs supported by the wind industry are located at more than 400 facilities across 43 states.
On Thursday the President will make clear the importance of these tax credits for American businesses and underscore the thousands of jobs that are at stake if Congress continues to fail to take action.
Congress’ To Do List
1. Reward American Jobs, Eliminate Tax Incentives To Ship Jobs Overseas: Congress needs to attract and keep good jobs in the United States by passing legislation that gives companies a new 20 percent tax credit for the cost of moving their operations back to the U.S. and pay for it by eliminating tax incentives that allow companies to deduct the costs of moving their business abroad.
2. Cut Red Tape So Responsible Homeowners Can Refinance: Congress needs to pass legislation to cut red tape in the mortgage market so that responsible families who have been paying their mortgages on time can feel secure in their home by refinancing at today’s lower rates.
3. Invest in a New Hire Tax Credit For Small Businesses: Congress needs to invest in small businesses and jumpstart new hiring by passing legislation that gives a 10 percent income tax credit for firms that create new jobs or increase wages in 2012 and that extends 100 percent expensing in 2012 for all businesses.
4. Create Jobs By Investing In Affordable Clean Energy: Congress needs to help put America in control of its energy future by passing legislation that will extend the Production Tax Credit to support American jobs and manufacturing alongside an expansion of the 30 percent tax credit to investments in clean energy manufacturing (48C Advanced Energy Manufacturing Tax Credit).
5. Put Returning Veterans to Work Using Skills Developed in the Military: Congress needs to honor our commitment to returning veterans by passing legislation that creates a Veterans Jobs Corps to help Afghanistan and Iraq veterans get jobs as cops and firefighters, as well as other jobs serving their communities.
The President’s plan for congressional action has two key components:
Congress needs to help put America in control of its energy future by passing legislation that will extend the Production Tax Credit to support American jobs and manufacturing in the wind industry alongside an expansion of the 48C Advanced Energy Manufacturing Tax Credit that supports American-made clean energy manufacturing.
• Production Tax Credit: The Production Tax Credit, which expires at the end of 2012, provides a 2.2 cent per kilowatt hour credit for utility scale wind producers. Congress should act to extend the credit.
o By extending the PTC benefits for American clean energy producers we can avoid layoffs across the country: The wind industry projects that nearly 30,000 jobs will be lost next year if the PTC expires, including direct jobs as well as those in its supply chain. Concern has historical precedent:
§ In the three historical moments when the credit was allowed to expire (June 1999, December 2001, and December 2003), there were two important effects: uncertainty about long-run profitability increased, and planned investments were delayed as producers waited for the credit to be renewed.
§ According to the Council of Economic Advisers (2010), in years when the PTC was not in place, the growth rate of installed wind capacity slowed substantially, by 27 percentage points in that year relative to the average annual growth rate that includes the year prior and the year after the PTC expiration.
o Extension of the PTC has wide support across the political spectrum: The extension is supported by the Chamber of Commerce, the National Association of Manufacturers, and the National Governors Association, as well as Republican Governors and Republicans in both the House and the Senate.
• “48C” Advanced Energy Manufacturing Tax Credit: The Advanced Energy Manufacturing Tax Credit provides a 30 percent investment credit to manufacturers who invest in capital equipment to make components for clean energy projects in the U.S., working in tandem with the Production Tax Credit to create jobs and help reduce our dependence on foreign oil and secure a clean energy future for the United States.
o A successful program to leverage private investment: In the Recovery Act, $2.3bn in 48C credits were offered, and the program was over-subscribed by more than 3-to-1, meaning that over $5 billion projects with merit did not get funding. The President’s plan calls for an additional $5 billion in credits, which would support at least $17 billion in direct investment in clean energy manufacturing facilities.
o Supporting a secure energy future: Qualifying technologies include solar panels, wind turbines, and geothermal generation; fuel cells, advanced vehicle batteries, and smart grid technologies; carbon capture and sequestration technologies; advanced vehicles and advanced vehicle components.