I hope everyone saw Josh’s Saturday update on the green tax breaks that may or may not end up in the stimulus package.
The L.A. Times has another update today. There are quite a few Dem heavyweights behind Baucus’ alternative stimulus bill, the one with green tax breaks, but its fate is unclear. The vote happens Wednesday.
Two bits of the story are worth specifically calling out. First, this:
… the proposed benefits for green energy mark another advance for an industry that is becoming one of the darlings of Democratic-controlled Capitol Hill.
"It’s a unique moment in history for the renewable industry," said Scott Segal, a longtime energy lobbyist in Washington. "The one thing that the Chamber of Commerce and the Sierra Club agree on is that the answer to climate change is transformative technologies."
This is all to the good. One hates to give in to a cynical and mechanistic view of politics, but … if we want to battle back the fossil lobbyists, we need more than moral suasion. We need countervailing lobbyists, with money and political clout. That’s what the clean energy sector can eventually generate.
Second:
"It makes no sense in a stimulus package," said Chad Stone, chief economist at the Center on Budget and Policy Priorities. Stone and others argue that direct payouts, such as unemployment insurance or food stamps, pump money into an ailing economy more quickly.
A) This is accurate. B) So what?
If you’re judging stimulus measures purely by how fast they get money into the economy — to deal with a recession that may well already be underway — these tax incentives aren’t the most effective way to go. (Yes, yes, I’m fully convinced of the wonder and glory and jobs that clean energy can create. It just can’t create them overnight, and overnight is when we need stimulus.)
However, like ol’ Don Rumsfeld said, freedom is messy. Legislating is a compromised, ad hoc business. This is a good opportunity to get something we’ve needed for a long time and are having trouble getting elsewhere, so I’m disinclined to be swayed by high-minded parliamentary concerns. These tax credits are good economics and good climate policy; if they are suboptimal qua fiscal stimulus, well … tough nuts. If the donkey can get you there, no sense waiting for a pony.
