ECONOMY: Congress set to pass stimulus bill after leaders strike deal on $790B measure
Alex Kaplun, Ben Geman, Katherine Ling and Dan Berman, E&E
The House and Senate could vote as early as today on an $790
billion economic stimulus bill, handing President Obama his first
major legislative victory.
The conference report includes billions of dollars for renewable
energy and energy efficiency programs, climate change and other
science research, water and transportation infrastructure projects,
among other issue areas, according to a summary from the office of
House Speaker Nancy Pelosi (D-Calif.).
Party leaders moved with unusual haste over the last two days to
come to an agreement on the mammoth spending package, and leadership
and a key group of moderate senators assured reporters the
conference agreement will clear both chambers. "There is an
agreement that will get 61 votes -- that's the bottom line," Senate
Finance Chairman Max Baucus (D-Mont.) told reporters yesterday.
The House has already approved a rule that would allow it to pass
the legislation today and Baucus said the Senate could follow suit
later this evening, adding that he did not expect Senate Republicans
to try to slow the process.
Though the fight over the bill was perhaps more fierce and
perhaps longer than top Democrats had anticipated, it also allows
Obama to tout a significant legislative victory just three weeks
after taking office.
"[It's] a plan that will provide immediate tax relief to families
and businesses, while investing in priorities like health care,
education, energy, and infrastructure that will grow our economy
once more," Obama said in a statement last night. "I'm grateful to
the House Democrats for starting this process, and for members in
the House and Senate for moving it along with the urgency that this
Renewable project grants make the cut
The bill includes a program that provides grants that wind, solar
and other renewable project developers can use in lieu of federal
tax credits that have been a major source of project financing.
The renewable energy sector had lobbied hard for such direct
payments. They said that tax credits are not a useful financing
method during the economic downturn, when would-be project funders
lack the tax liability to make use of the incentive. Also, the
financial crisis has pushed banks and other renewable project
backers to the sidelines, prompting the industry to seek new
According to Pelosi's office, the conference report includes grants
of up to 30 percent of the cost of building new projects "to address
current renewable energy credit market concerns." It was not clear
at press time whether the grant provision was altered at all from
the version that was in the stimulus bill the House initially
Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.)
had criticized that measure, arguing it put taxpayers at risk, and
had vowed to seek changes in the conference talks (E&ENews PM, Feb.
The bill's overall renewable energy and energy efficiency tax
title is $20 billion over a decade, according to the House summary.
It includes a three year extension of the production tax credit for
wind projects. The incentive had been scheduled to expire at the end
of this year but now may be claimed for projects placed in service
before the end of 2012. It also extends the tax credit for three
years, through 2013, for biomass, geothermal, hydropower, landfill
gas, waste-to-energy, and marine renewable power projects, according
to the House summary.
Other tax provisions include an extension of credits for making
energy efficiency improvements to existing homes by buying efficient
furnaces, windows and other equipment. The House and Senate versions
of the bill had extended these credits through 2010, increased the
credit level to 30 percent, and replaced dollar caps on the amount
of credits available for specific equipment with an aggregate cap of
$1,500 on combined purchases.
The conference bill also includes tax credits for investing in
the manufacture of equipment used in various advanced energy
projects, such as renewable power. The manufacturing tax credit was
in the Senate-passed version of the bill but not the House measure.
Other provisions include additional clean energy renewable bonds and
expanded credits for purchasing plug-in hybrid vehicles.
About $30 billion of direct spending will go to support energy
efficiency, renewable energy, smart grid technology to make the grid
more reliable and efficient, and advanced electric battery research
programs, all of which will create 500,000 jobs according to
Renewable energy and transmission received $13.9 billion in loan
guarantees, according to the Associated Press, which is higher than
either version of the bill previously had.
The fate of the $50 billion in loan guarantees for all advanced
technologies that reduce greenhouse gas emissions, including nuclear
energy, present in the Senate bill could not be confirmed, although
an anti-nuclear group, Beyond Nuclear, said it had been cut. The
provision, included in the Senate version, could increase the cap on
loan guarantees for advanced low-carbon technology by $50 billion,
more than double the current loan guarantee cap of $38 billion, and
would stay applicable to advanced "clean energy" technology as
defined in the 2005 Energy Policy Act, which includes nuclear,
renewable energy, biofuels and coal with carbon capture and
The energy efficiency measures included $5 billion in
weatherization assistance -- nearly $2 billion more than the Senate
version -- but $4.5 billion to make federal buildings "green" --
more along the lines of the Senate measure.
The provisions address Obama's concerns voiced in his press
conference Monday by including about $6.3 billion for increasing
energy efficiency in federally supported housing programs.
Funding for various conservation programs is seen as vital to
advocates of combating climate change, who see energy efficiency
providing the large opportunities, especially in the near-term, for
emissions reductions while renewable energies and other technologies
scale up. "The cheapest set of reductions are clearly going to be
the result of energy efficiency," said Dan Reicher, director of
climate and energy programs at Google, in an interview yesterday at
an energy conference in Houston.
The House won a battle for $400 million for the Advanced Research
Projects Agency for Energy (ARPA-E) program, designed to bring
together the greatest minds from industry, academia and government
"to pursue high-risk, high-reward research." The Senate bill
included no money for ARPA-E.
The bill also includes $1.6 billion for the Energy Department's
Office of Science. The program is the single largest supporter of
basic physical sciences research in the United States, providing
more than 40 percent of total funding. It oversees the nation's
research programs in climate science, advanced computing, biofuels,
high-energy physics, nuclear physics and fusion energy sciences (E&E
Daily, Feb. 4).
For climate change, the conference agreement provides $400
million for NASA climate research, also even with the House number.
The Senate bill would have provided an additional $100 million.
NASA is the largest funding source for climate research because
of its satellite monitoring programs. In recent years, though, the
agency has struggled because of budget cuts, and competition from
the space flight program has caused a decline in earth science
In 2007, the National Academy of Sciences warned that
belt-tightening at NASA and the National Oceanic and Atmospheric
Administration, the other primary climate research agency, had put
the United States' ability to monitor climate change and severe
weather "at great risk" (ClimateWire, Jan. 16).
One of the Senate moderates who helped move the bill, Sen. Susan
Collins (R-Maine), said the final agreement actually slightly
boosted transportation infrastructure spending from the Senate
level, bumping the bill to $49.6 billion from $46 billion.
The difference appeared to be the result of a major boost in
funding for high-speed rail, with the conference agreement
allocating $8 billion for the initiative. The original Senate bill
contained $2 billion for the program while the House version had
Other than that change, the agreement sticks relatively close to
the levels included in the Senate version of the stimulus package.
The bill provides a total of $29 billion for road and bridge
construction, with a requirement that states have to obligate at
least half of those funds within 120 days. Besides the $8 billion
for high-speed rail, the bill also provides another $8.4 billion in
funding for transit programs.
Additionally, the legislation provides a total of $18 billion for
clean water, flood control and environmental restoration projects.
A long day
The agreement came at the end of a hectic day in which Senate
Majority Leader Harry Reid (D-Nev.) and a group of moderates
announced the deal even before many top House Democrats had a chance
to be briefed on the agreement, forcing the postponement of a
planned House-Senate conference to sign off on the legislation.
"Like any negotiations, this involved give and take, and if you
don't mind my saying so, that's an understatement," Reid told
reporters. "The middle ground we've reached creates more jobs than
the original Senate bill and spends less than the original House
But shortly after that pronouncement, senators were forced to
postpone the conference meeting for two hours as Reid and Pelosi met
in the speaker's office to hash out a final deal on the level of
funding for school construction, a major issue of contention between
the two chambers.
Pelosi said the two-hour delay was worthwhile. "We had to make
sure that the investments in education were there," she told
reporters. "We've been working on this for a very, very long time
and it was always viewed that we would have a target for the
conference, but that we would not go in before we were ready."
The dispute seemingly threw some of the lawmakers closely involved
on the negotiations on the Senate side for a loop.
"There was general agreement," Sen. Ben Nelson (D-Neb.), one of the
moderates involved in negotiating the final bill, told reporters
moments after the conference committee was postponed. "If we didn't
have an agreement, then there wouldn't have been a news conference."
Nelson was one of several lawmakers at the center of the wheeling
and dealing -- part of a small group of Senate moderates from both
sides of the aisle who seemingly held the bill's fate in their
hands. The group had insisted that the final product come in at
under $800 billion and closely resembled the Senate version -- two
goals that were met in the negotiations.
As Reid announced the agreement, he was flanked by many of the
moderates whose votes allowed for the Senate package to move and who
held significant sway over whether any conference agreement would
get Senate approval, including Nelson, Collins, and Sens. Olympia
Snowe (R-Maine), Arlen Specter (R-Pa.) and Joe Lieberman (I-Conn.).
"We think have made the right choices in this legislation; it's a
jobs bill, and today you might call us the jobs squad," Nelson said.
The moderates said the biggest stumbling block in achieving a deal
was finding a way to push the legislation below the $800 billion
figure -- $50 billion less than the version passed by the Senate on
Tuesday. And even after the final deal was announced, virtually
everyone involved said the legislation was far from perfect but that
the economic crisis required immediate action.
"Did I agree with some of the things they made us swallow? No I
didn't," Reid said of the requirements pushed by the moderates. "But
that's the way the Senate works."
Meanwhile, Republicans used last night's conference meeting to
again criticize Democrats for moving a bill through a process that
prevented bipartisan cooperation. House Appropriations ranking
member Jerry Lewis (R-Calif.) in particular complained that the bill
was brought to conference even as most members had yet to see the
"This is where we are supposed to be negotiating this bill ...
and this is not why we're here tonight," Lewis said.
But Democrats maintained that they needed to move on the
legislation as quickly as possible to deal with the nation's
economic crisis. "We can all talk about how this bill could be
better, we can all talk about how we wish we had the time to examine
it line by line ... we don't have that luxury," said House Energy
and Commerce Chairman Henry Waxman (D-Calif.).
Senior reporter Ben Geman reported from Houston.