Members of the Obama administration are fanning out across Washington to promote the President's signature legislative victory -- the $787 billion stimulus package passed a year ago today. Included in that package was about $70 billion to promote investment in “green energy" and jump starting development of both wind and solar energy to cut greenhouse gas emissions.
While there is disagreement over how many “green” jobs the stimulus package created, the US Congressional Budget Office estimated last September that at least 600,000 jobs were saved or created as a result of the stimulus package. “We expect that the first half of 2010 will have 60,000 jobs created or saved as a result of DOE stimulus funds,” said David Sandalow, assistant secretary for policy and international affairs at the Department of Energy. “The stimulus package is a down payment, which alone is not sufficient to meet our clean energy goals,” he added. The Energy Department in particular was used as a vehicle to promote improvements in energy infrastructure and boost employment.
The stimulus package involved the extension of production tax credits for wind and solar power, $5 billion to insulate in 650,000 homes by 2010 and $4 billion for electric vehicles that will help to construct three plants to build cars and 30 plants that will make electric batteries that could put as many as a quarter million electric cars on the road by 2015, Sandalow said. The Obama administration has been criticized both for the slow rate of stimulus spending and for its uneven and sometimes unmeasurable creation of jobs. The White House had said last year that it expected passage of a stimulus bill to limit the US unemployment rate to about 8% in 2009. Instead, unemployment shot up past 10% for several months before falling to 9.7% in January.
Only $5 billion to $10 billion of the “clean energy” stimulus funds have entered the marketplace one year after they were approved, according to Ethan Zindler, head of North American Research for Bloomberg New Energy Finance. About $30 billion has been allocated, leaving about $35 billion to be disbursed by government agencies, he said. With this kind of money at stake, the law of unintended consequences can kick in, especially when it collides with other parts of the Obama administration’s environment and energy strategy.
The stimulus has been called “spending tomorrow’s money, on yesterday’s factories, for today’s workers,” said Kevin Book, managing director of research for Clearview Energy Partners. The administration’s decision last May to raise fuel-economy standards by more than a third over the next decade could have a negative impact on electric cars just as they start to compete for consumers in the marketplace, Book said.
Additionally, the cap-and-trade bill passed by the House of Representatives last year could lead to natural gas-fired power plants being displaced by wind or solar, with coal-fired generation capacity staying more or less unchanged, potentially undermining one of the administration's goals, Book added. Meanwhile, Zindler noted that because many of the spending programs are subject to a time-lag effect, much of the economic impact from the stimulus program will only come in 2010 and 2011.