I like to think that I am a person who admits when I am wrong. That is something my father taught me. As a taxpayer advocate for the past 28+ years I have criticized Congress for taking so much time off in the summer. My belief was that they are getting paid a decent salary ($174K with really good benefits) so they should be working. Well, the Senate has been in session all summer and it is not good for taxpayers or the country. They are currently considering a $1.2 trillion infrastructure bill loaded with hundreds of billions in spending that has nothing to do with infrastructure. Next week, the Senate will be considering a $3.5 trillion budget resolution that MIGHT have tax increases. It’s clear that taxpayers are a lot safer with Congress being at home sipping on a gin and tonic by the pool. In the meantime, check out a list of amendments on the infrastructure bill that we like/dislike here. And, as always, call your Senator (202-224-3121) to let them know what you think about these amendments and the whole bill.
The Many Problems with Taxpayer-Subsidized Green Energy
TPA Senior Fellow Ross Marchand has a three-part series this week on taxpayer-subsidized green energy. The timing is perfect as the Senate considers a $1.2 trillion infrastructure bill that contains hundreds of billions of dollars in green energy projects.
Part I - The U.S. Department of Energy's (DOE) Loan Program Puts Crony Capitalists in the Green
Supporters of federal loan guarantees for renewables often argue that critics cherry-pick the worst outcomes in the DOE’s lending operations to make green government loans look ineffective or inefficient. Yet, the data makes clear that even the loan guarantees trumpeted as “successes” by energy officials are hardly the best use of taxpayer dollars. In its fiscal year (FY) 2020 review of Loan Programs Office portfolio, the DOE repeatedly highlights NextEra Energy’s 250-megawatt (MW) Genesis Solar Project for paying back its agency-backed loan “in full 18 years ahead of schedule” after receiving more than $850 million in taxpayer-backed guarantees in 2011. While it’s nice that taxpayers got their money back, it is unclear just what the DOE was trying to accomplish in giving a large loan guarantee to an already-successful company that already had the solar project in the works. When the DOE greenlit the guarantee 10 years ago, NextEra had revenues totaling more than $15 billion with plenty of projects underway and purchase power agreements inked with major companies. By the time the project started receiving taxpayer dollars, the project had already been in development for four years and was more than six months into construction. While it can never be known for sure, it just does not seem all that likely that NextEra would have suddenly pulled the plug on the massive project and wasted the committed time and resources. One thing that is clear, though: DOE picked an unnecessarily expensive way to subsidize solar. Genesis relies on something called concentrated solar power (CSP), which makes use of the sun’s energy and can store this energy for future use. More often than not, the agency’s supposed success stories “result from the DOE awarding money to very profitable, well-established companies or ones that benefit from the great number of federal, state, and local subsidies at their disposal.” In assessing the program’s future, policymakers need to ask hard questions about the real goal of the program. If the objective is to identify “safe” projects and throw money at Fortune 500 companies in order to pad the portfolio’s finances, there seems to be little issue. But if the goal is to spearhead a “cradle-to-market innovation strategy” to commercialize cutting-edge technologies, the DOE is falling down on the job. Click here for the full article.
Part II - Department of Energy Innovation Funding Falls Flat
As seen in the previous piece in this series, the Department of Energy (DOE) claims that its loan guarantees have bolstered renewable energy even though their backed projects would have likely happened anyway. Through the Advanced Research Projects Agency-Energy (ARPA-E), the DOE also funds “high-impact energy technologies that are too early for private-sector investment.” Despite roughly $3 billion in ARPA-E spending since 2009, the initiative has failed to produce a viable bridge to private sector innovation. Instead of further bolstering its budget, policymakers need to take a long, hard look at where ARPA-E has gone wrong. After ten years of ARPA-E operations, there is plenty of data to ascertain whether the program is living up to its expectations. Writing for the publication Nature, researchers from Harvard, Cambridge, the University of Massachusetts, and the Technical University of Munich found that ARPA-E recipients, “did not have better business outcomes than the larger pool of US cleantech startups that did not apply for ARPA-E funds.” The same researchers compared the patent filings of recipients and non-recipients of government funding. According to the researchers, “startups that received funding from ARPA-E in its first year of operation filed twice the number of patents in subsequent years compared to other similar firms without ARPA-E funding.” However, the team admits that it’s unclear whether ARPA-E is leading to increased patenting or if the program has found a way to pick firms “with a high propensity to patent.” Policymakers will likely continue pushing for an alphabet soup of “innovation” agencies that are all-but-certain to have disappointing outcomes. The federal government would be far better off examining the many problems facing startups, including high taxes and out-of-control regulatory costs. Addressing these issues would go a far longer way toward increasing innovation than ARPA. Click here for the full article.
Part III - There are Far Better Ways to Clean the Environment Than Taxpayer Handouts
The Department of Energy is hardly on the cutting edge of technological innovation. Its loan guarantee program subsidizes safe and well-established companies whose taxpayer-funded projects probably would have happened anyway. Its cleantech startup “investments” do not result in meaningful private sector investment. There are plenty of examples of what goes wrong when the government tries to steer markets in a specific direction. Despite these failures, policies can be pursued to empower companies to balance innovation and ecology without breaking the bank. Free market reforms are a far better alternative to taxpayer-backed loans and subsidies. It’s difficult to start a business and expand the venture into uncharted territory. One key issue is ensuring that a business meets all of the regulatory requirements set forth by federal and state governments. The Securities and Exchange Commission (SEC) has shown in recent years that it isn’t afraid to target startups for investigation if the agency believes that the companies have not disclosed enough information about previous problems. This not only creates line-drawing problem, but also results in a situation where outsiders are afraid to take the reigns of a troubled startup and steer the company in a better direction. Anything short of a full recounting of previous management’s failures (which may not always be apparent to new leadership) can result in multi-million-dollar fines. And the more varied a company’s financial offerings become, the greater potential exists for regulatory scrutiny. President Biden should tackle regulatory issues by working closely with leadership at agencies such as the SEC and the Federal Energy and Regulatory Commission to see how rule relaxations could make life easier for entrepreneurs. Harnessing innovation isn’t the only path to a cleaner environment. The new administration’s climate policy focuses almost exclusively on the private sector, while ignoring government actions and services that contribute to pollution. Researchers at Indiana University and Texas A&M found that publicly-owned power plants, hospitals, and water utilities were 15-20 percent more likely to have violated federal air and water standards than their private counterparts. And, at least 900 (70 percent) of the 1,300 contaminated Superfund sites spread out across America are military-related. The right combination of regulatory reform and priority shifts can clean the air while ensuring continued innovation for decades to come. Click here for the full article.
Vaccine Misinformation and Distrust Undermine Fight Against Variants
As cases of COVID-19’s Delta variant surge, there’s a crisis of confidence emerging around vaccines. The U.S. enthusiastically embraced vaccines from (almost) day one, but now the country faces difficulty vaccinating the last 50 percent or so of Americans. Vaccine reluctance started with politicians such as then-vice-presidential candidate Kamala Harris and is now being driven by increasingly loud conservative voices who warn of the dangers of vaccination without any evidence. And the increasing call for renewed coronavirus restrictions is setting the stage for future vaccine weariness. Underneath all of these narratives and the exhausting rhetoric is a simple truth: vaccination is the only ticket back to how things were before 2020. The sooner the country realizes this, the sooner the country can ditch fearmongering and pseudoscience. The science is abundantly clear that vaccines are very effective in preventing hospitalization and death. The protection even holds for potentially more lethal, contagious strains of the disease such as the Delta variant. In fact, around 99.5 percent of people who have succumbed to COVID-19 in recent months have not been inoculated against the deadly disease. Despite these clear figures, some have stubbornly clung onto the idea that vaccines don’t work and/or are dangerous. Conservative talk-show host Phil Valentine told his listeners that people were “probably safer not getting” the vaccine unless they are high risk, ignoring that an increasing percentage of COVID-19 hospital patients are in their twenties and thirties. The radio host is now hospitalized with coronavirus, and his family reportedly regrets not being more “pro-vaccine.”
These loud anti-vaccine voices are not thriving in a vacuum. Critics of “establishment” medical advice seem more credible to millions of Americans, given the confusing messaging that is coming from policymakers not only in Washington, D.C., but across the country. The CDC has now reversed course and is telling even some vaccinated individuals to mask up in areas with “substantial or high transmission.” Government guidance should continue to encourage vaccinated people to live a normal, fruitful life, while allowing business owners and entertainment venues to limit their interactions with unvaccinated people. It certainly doesn’t help that populous, coronavirus-prone states such as Florida are prohibiting businesses from “requiring patrons or customers to provide any documentation certifying COVID-19 vaccination or post-transmission recovery.” Other states have followed suit to varying degrees. There’s also some legal ambiguity on this issue from the federal government. While a business asking their employees for their vaccination status is not a Health Insurance Portability and Accountability Act (HIPAA) violation, the HIPAA Journal notes, “requiring employees to disclose additional health information such as the reason why they are not vaccinated could potentially violate federal laws.”
Federal and state governments are making it increasingly difficult for employers and businesses to sanction people for bad behaviors that can have ruinous consequences for others. Collective punishment (i.e., renewed across-the-board mandates) simply results in a wearier population without encouraging vaccination. The coronavirus endgame will likely be a combination of natural immunity, drugs to treat COVID-19 symptoms, and hard-fought vaccination gains. All of these things will not happen overnight. In the meantime, governments must empower vaccinated individuals to live their lives and allow businesses to prioritize vaccinated patrons. Politicians, bureaucrats, and talking heads should support a steady, evidence-based approach instead of undermining the science behind vaccines.
BLOGS:
Monday: Watchdog Warns of Excessive and Irresponsible Spending While Ignoring the Debt Ceiling
Tuesday: Vaccine Misinformation and Distrust Undermine Fight Against Variants
Tuesday: Watchdog Slams Reckless Taxpayer Spending in West Des Moines
Wednesday: TPA Letter to Senators: Amend the Infrastructure Package
Friday: Watchdog Calls for Immediate USPS Reform After $3 Billion Net Loss
Friday: Taxpayer Watchdog Urges ‘No’ Vote on Infrastructure Package
MEDIA:
July 30, 2021: I appeared on WMAY 970 AM (Springfield, Ill.) Morning Newsfeed to talk about the infrastructure bill.
July 30, 2021: WBFF Fox45 (Baltimore, Md.) quoted TPA in their story, “Former Staffer describes deep seated problems at Baltimore's Public Works Department.”
July 30, 2021: The Sierra Sun Times (Truckee, Calif.) mentioned TPA in their story, “U.S. Senator Dianne Feinstein’s Bill Would Protect Congressional Whistleblowers from Retaliation.”
July 30, 2021: WBFF Fox45 (Baltimore, Md.) quoted TPA in their story, “Mosbys create defense fund for legal fees as federal investigation continues.”
July 30, 2021: The Herald-News (Joliet, Ill.) quoted TPA in their story, “Taxpayer advocate critical of duplicative spending in $1.2 trillion infrastructure proposal.”
August 1, 2021: Inside Sources ran TPA’s op-ed, “Despite Data, WHO’s War on Tobacco Alternatives Continues.”
August 2, 2021: WBFF Fox45 (Baltimore, Md.) quoted TPA in their story, “"In the Feds crosshairs," prominent attorney calls for contributions to Mosby's defense.”
August 2, 2021: The Illinois Radio Network quoted TPA in their article. “Taxpayer advocate critical of duplicative spending in $1.2 trillion infrastructure proposal.”
August 2, 2021: WBFF Fox45 (Baltimore, Md.) interviewed me about the Baltimore City Inspector General
August 2, 2021: NTD television interviewed me about the infrastructure bill.
August 3, 2021: WBFF Fox45 (Baltimore, Md.) quoted TPA in their story, “Mosby stays silent on legal defense fund.”
August 3, 2021: Inside Sources ran TPA’s op-ed, “Vaccine Misinformation and Distrust Undermine Fight Against Variants.”
August 3, 2021: Real Clear Energy ran TPA’s op-ed, “The U.S. Department of Energy's Loan Program Puts Crony Capitalists in the Green.”
August 4, 2021: I appeared on KRC 550 AM (Cincinnati, Ohio) to talk about the infrastructure bill.
August 4, 2021: ET Edge Insights ran TPA’s op-ed, “Despite Data, War on Tobacco Alternatives Continues.”
August 4, 2021: Real Clear Energy ran TPA’s op-ed, “The U.S. Department of Energy's Innovation Funding Falls Flat.”
August 5, 2021: WBFF Fox45 (Baltimore, Md.) interviewed me about a new report from the Baltimore City Inspector General.
August 5, 2021: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about the eviction moratorium.
August 5, 2021: The Center Square ran TPA’s op-ed, “The many reasons to celebrate International Beer Day on Friday.”
August 5, 2021: I appeared on the Tim Jones Show, 97.1 FM (St. Louis, Mo.) to talk about the infrastructure bill.
Have a great weekend!
