LOVE THOSE LOAN GUARANTEES
Federal Energy Loan Guarantees Win Clean Bill of Health; Noted Conservative’s Independent Report Demonstrates Effectiveness
Richard Caperton, February 11, 2012 (Center for American Progress)
"…Federal loan guarantees for energy projects have been successful, cost-effective investments…[according to] Herb Allison, former national finance chairman for Sen. John McCain (R-AZ), who led a team of accountants and auditors in conducting an independent analysis of the Department of Energy’s Loan Guarantee Program…
"…[D]espite the hysteria around the now-bankrupt solar-panel maker Solyndra LLC, this program will cost [$2.7billion instead of $5 billion, more than] $2 billion less than initially expected…[T]he fossil-fuel industry got a whopping $70 billion in government subsidies from 2002 to 2008. Many of these subsidies have been in place for nearly 100 years. The nuclear industry, too, has benefited from billions of dollars in subsidies, including loan guarantees, over the last half-century…"
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"…[The Allison’s review] includes an analysis of every loan guarantee issued from Department of Energy, as well as recommendations for managing this portfolio of federal guarantees going forward. This independent review was requested by the White House in late 2011 to make sure that the DOE loan guarantee portfolio was cost-effective for taxpayers…[It confirms findings from] the Congressional Research Service and Bloomberg Government…that the overwhelming majority of the portfolio was in electrical generation projects, which DOE structured to have very low risk…[and] the media’s incessant focus on Solyndra was ‘not proportional to its impact.'
"There are multiple reasons why the risks to taxpayers from this program are so low…It’s important to remember why the Loan Guarantee Program exists. Innovative companies—key to our future competitiveness and economic prosperity—risk getting caught in the “valley of death,” where nascent but promising companies often languish as they strive to accumulate the necessary funds…[It] can require hundreds of millions, even billions, of dollars…The DOE’s Loan Guarantee Program brought companies across the “valley of death” by providing these businesses with loan guarantees that made it possible to raise the necessary capital and…The Loan Guarantee Program helped America compete in the global economy…"