Mitt Romney isn’t famous for taking political risks, so it was notable and welcome on Monday when he came out against subsidies for wind power. If that doesn’t sound like stop-the-presses news, remember that Republicans aren’t really as implacably opposed to energy handouts as both Democrats and Republicans want the public to believe.
So from the top: The wind industry more or less exists at the pleasure of politics, specifically because of a federal subsidy known as the production tax credit that provides developers with a 2.2-cent writeoff for every kilowatt hour of electricity they produce. In effect, the credit means that wind’s energy competitors are taxed at a higher rate. This annual $1.6 billion special advantage has hung around for a decade but lapses at the end of the year, and Washington is now debating an extension.
Holding fast on this deadline ought to be an easy call for Republicans, who say they want to make the tax code fairer and get the government out of picking energy winners and losers in particular. But a sizeable cheering section within the GOP wants to maintain the status quo.
Many are from Iowa and the other upper Midwestern states where the wind industry is concentrated, and, well, energy politics is often local. Others are afraid of President Obama’s rhetoric. He and other Democrats invoke the wind credit at every opportunity and claim its expiration would prove Republicans are against manufacturing and jobs.
Mr. Romney in the past has said the industry “seems to be operating more on faith than on fact-based economic calculation,” but lately he’s been reticent on the wind credit. If this was strategic ambiguity, the danger is that it might disillusion voters who send Republicans to Washington on principle, and not to give into the crony capitalist temptation as so many of them ultimately do.
In a statement to the Des Moines Register on Monday, the Romney campaign was definitive: “He will allow the wind credit to expire, end the stimulus boondoggles, and create a level playing field on which all sources of energy can compete on their merits,” a spokesman wrote. “Wind energy will thrive wherever it is economically competitive, and wherever private sector competitors with far more experience than the President believe the investment will produce results.”
Just so. The wind lobbyists claim that 100,000 jobs and many millions of dollars in turbine orders require the production tax credit to survive, not seeming to understand how sad such dependency and special pleading makes their industry sound. And congratulations to Mr. Romney for bucking his own party’s anti-free marketeers when the path of least resistance runs in the other direction.
|Wind Watch relies entirely
on User Funding