Five years ago, U.S. President at the time George W. Bush created the Advanced Technology Vehicle Manufacturing Program. It was a legislation providing up to US$25 billion of low-cost government loans to automakers in order to restructure their facilities and develop fuel-efficient vehicles.
The same program continued under the Obama administration, which has made reducing greenhouse gas emissions and promoting the use of alternative energy sources one of its priorities.
However, after the bankruptcy of solar panel maker Solyndra, LLC which had received US$535 million in federal loans, the Energy Department has frozen all funding pending a review. This had a negative effect on upstart companies, such as Fisker Automotive, which relied heavily on these subsidies.
According to a Detroit News report, Republican Senator Paul Ryan, who is the chairman of the House Budget Committee, says that he “would immediately terminate all programs that allow government to play venture capitalist with taxpayers’ money”.
President Obama recently said that oil prices will not go down, due to increased demand, and therefore investing in alternative sources is the only viable solution.
The GOP criticizes Obama’s policy towards “green” sources of energy, claiming that the current administration “blocks proven domestic energy sources while spending recklessly on uncompetitive alternatives.”
The Republicans target not only the automakers’ retooling loans, but also high-speed rail funding, such as the US$200 million awarded to Michigan for a 135-mile section that would speed up train travel between Detroit and Chicago.
The GOP wants to cancel all remaining programs in order to save up to US$5.3 trillion over the next decade. Its budget proposal says: “In the wake of these failures, and with the federal government’s fiscal challenges making long-term subsidization infeasible, high-speed rail and other projects should be pursued only if they can be established as self-supporting commercial services.”
