Wednesday, June 15, 2011
(Todd Zwillich -- Washington, D.C) As Congress rummages for every dollar it can find to throw toward the national debt, one Republican senator says he knows where he can find billions: energy tax breaks.
Tennessee Sen. Lamar Alexander, the number-three Republican in the Senate, says he's cooking up a plan to cancel most if not all tax breaks enjoyed by the energy sector. Instead Alexander would spend the money on clean energy R+D and lowering the deficit.
This comes a day after Alexander and 33 other Republicans backed a proposal to eliminate $6 billion in taxpayer subsidies enjoyed by the ethanol industry. That vote was seen in Washington as a strong signal that Republicans are ready to put once-sacred tax breaks on the table in an effort to strike a debt deal with Democrats.
"I and my staff are looking at all energy tax breaks," Alexander told reporters on Capitol Hill Wednesday. "I expect that before long I'll have legislation that will look at all tax breaks," he said.
Such a bill would almost certainly become part of a broader debate over reducing the national debt or another fight over tax code reform expected later this year.
Either way, the success of Alexander's effort could mean a fundamental reordering--or in some cases elimination--of billions in tax breaks helping the energy sector.
Alexander said he'll try to eliminate all or most long-standing energy tax breaks and instead put some of the money toward "a Manhattan project for clean energy research." A lot of the burden would fall squarely on utilities and power generation companies. But ethanol, natural gas, and oil and gas tax credits opposed by most Democrats would also presumably be included. Democrats are already vowing to include a repeal of oil company tax credits in any deal with Republicans over the debt.
Alexander is a supporter of electric cars, however, and he said Wednesday he'd favor some "jump start" tax incentives for electric cars and the development of a 500-mile battery. The idea, he said, is to give a boost to burgeoning clean energy technology then cast it to the mercy of the free market.
"I don't think electric cars deserve any sort of government support after four, five years. If they can't survive in the marketplace then they ought to be, y'know, thrown in the junk pile," Alexander said.
Right now consumers can cash in on a $7,500 credit for buying a plug-in electric car. There's also a $1,000 federal residential charging credit for plug-in car owners.