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US House includes $32 bil for grid, renewables in stimulus

January 15, 2009 - US House of Representatives leadership have unveiled their proposed $825 billion economic stimulus legislation, which includes $32 billion to transform the nation's electricity grid and boost renewable energy resources.

Congress over the next two weeks is expected to debate and vote on the so-called American Recovery and Reinvestment Act, which includes $550 billion in grants and loans that are targeted to stimulate the economy and $275 billion in tax cuts.

The measure, the product of weeks of negotiations between the House and President-elect Barack Obama's transition team, also will extend for three years production tax credits for a range of renewable industries.

"We have now frozen the design from the standpoint of our proposal," House Speaker Nancy Pelosi said January 15.

She emphasized that the bill will likely change the week ended January 23, when the House Appropriations and Ways and Means Committees mark it up.

The Senate is still working on its own proposal to kick-start the economy.

"We have shared values, and so we have shared priorities in the legislation," Pelosi said of the package Senate Democrats are crafting.

The Senate's version will not be identical to the House version and the two measures must be conferenced before they are sent to Obama for his signature.

House Democrats say their proposal is generally in sync with their president-elect's views, but there are differences.

Obama asked for $300 billion in tax credits, partly as a bid to earn Republican support for the measure.

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The House proposal stops $25 billion short of that request.

Direct spending also makes up a larger percentage of the overall bill than the incoming administration requested.

"We have more money for investments because we believe that is where job creation is greater," Pelosi said.

Republican Leader John Boehner of Ohio protested this shift, saying in a statement that the bill "appears to be grounded in the flawed notion that we can simply borrow and spend our way back to prosperity."

The House Appropriations Committee drafted the direct spending portion of the bill. Chairman David Obey, a Wisconsin Democrat, told reporters January 15 that more stimulus spending bills may be needed in the future because the US economy is deteriorating very rapidly.

"I believe this product may undershoot the mark," Obey said.

Obey seemed to downplay Obama's role in negotiating the bill, pointing out that he is not yet in office.

"They do not have the technical expertise they would have if they were running the show themselves," he said.

Republicans and moderate Democrats have more influence in the US Senate than in the House, and the upper chamber's bill may more closely adhere to Obama's proposed formula of 60% spending and 40% tax cuts.

For his part, Obama praised House Democrats for their "urgency" in producing a stimulus bill.

He said in a statement that the bill "will save or create over three million jobs, provide tax relief to struggling families and businesses that create jobs, and invest in priorities like health care, education, and energy that will make America strong and competitive in the 21st century."

His press office said he would head to a wind turbine plant in Ohio January 16 to tout the role of stimulus money in spurring renewable energy production and "green" jobs.

The stimulus measure contains at least $20 billion for renewable energy and energy efficiency tax cuts, up from Obama's original proposal of $10 billion.

Senate Finance Chairman Max Baucus of Montana said January 14 that his committee would provide between $20 billion and $25 billion in cuts, evenly divided between efficiency and renewable energy production.

The House Ways and Means Committee, which oversees tax policy in the lower chamber, has not released detailed information on its bill.

Committee staff say the measure will contain a three-year extension of the production tax credit for wind, geothermal and other industries.

Because the solar energy industry received an eight-year reauthorization last autumn of its investment tax credit it will not see an extension, an aide said.

According to a committee summary, the bill also will allow renewable energy industries to temporarily choose an investment tax credit rather than a production tax credit as a way of offsetting new expenses.

It will also fund new renewable energy projects that the House Energy and Commerce Committee designed.

A spokeswoman for that panel did not return calls to comment.

The tax package would also include more funds for the clean renewable energy bonds, qualified energy conservation bonds and "smart energy" conservation.

The bill's spending section, which Appropriations released January 15, billions of dollars for Department of Energy rograms. DOE's relatively small weatherization program would see a 12-fold increase from the $500 million Congress provided last September.

The package also includes $11 billion for improving the grid's efficiency and building new lines to reach remote renewable resources. A total of $4.5 billion would go to a Smart Grid Investment Program.

The package also contains $8 billion for loan guarantees for renewable energy power generation and transmission projects.

The package would provide significant support for energy efficiency, including $6.9 billion for local government energy efficiency block grants, $2.5 billion for energy efficiency housing retrofits and energy efficiency research and development.

Projects to weatherize houses in low-income neighborhoods would receive $6.2 billion.

To address climate change, the package would provide $2.4 billion for demonstration projects to help develop carbon capture and sequestration technology.

In an effort to get electric cars on the road, the bill offers $2 billion in loans and grants for vehicle batteries.

Another $200 million would go toward grants for electric vehicle technologies and $600 million would go to replace older federal fleets with alternative fuel vehicles.

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