Budget Compromise Looks OK for Projects in DOE Loan Guarantee Pipeline
The current version of the budget compromise provides relatively good news for projects seeking DOE loan guarantees. During the past several months, renewable energy projects in the DOE’s Loan Guarantee pipeline have been exposed to substantial uncertainty as a result of the budget crisis in DC. The developers of these projects have previously invested substantial resources to apply to the program which would become wasted effort if the program funds evaporate as the projects wait for DOE approval. The Loan Guarantee Program Office led by Jonathan Silver was clearly aware of this issue and prudently allowed all open solicitations to expire in early 2011 without issuing any new ones. The renewable energy project developers’ concern has been that the budget deal would involve a substantial claw back of previously appropriated funds that have not yet been committed to projects.
The battle is not yet resolved but the current compromise is encouraging for these projects. There is a claw back of $18.183 billion in uncommitted funds but these were funds appropriated under provisions that required that the Credit Subsidy Cost to be paid by developers. The Credit Subsidy Cost was the bane of the Loan Guarantee Program as it essentially required the program applicant to cover the present value risk that the project would default on the loan. The Stimulus Bill solved this problem and greatly increased the attractiveness of the Loan Guarantee Program by appropriating funds to cover the Credit Subsidy Cost. Similarly, the current budget compromise appropriates an additional $1.183 billion in funds and allows these funds to be utilized to cover Credit Subsidy Costs. Thus, while the provision claws back funds, these are funds that were not attractive due to program limitations whereas new funds are appropriated to the preferred program. In addition, the proposed legislation imposes an Office of Management and Budget certification of compliance requirement as a control on the program.
The current bill is HR 1473 and is likely to be voted on later this week and thus is still subject to amendments. To obtain the latest details and access to the bill, see the Open Congress site at http://www.opencongress.org/bill/112-h1473/show
President Obama Clamps Down on Lobbyists and First Amendment
On March 20th, President Obama issued a directive to the heads of executive branch departments and agencies. The directive is aimed at achieving the laudable goal of ensuring merit based decision-making for grants and other forms of stimulus funds provided by the American Recovery and Reinvestment Act of 2009 (usually referred to as the Stimulus Bill). It seems that while candidate Obama promised repeatedly during his campaign to limit the influence of lobbyists in Washington DC, the passage of the Stimulus Bill has sent record numbers of lobbyists to D.C. to scramble for federal dollars.
In apparent response to this, President Obama has singled out registered lobbyists and regulated their contacts with the executive branch. His directive provides that “executive department or agency officials shall not consider the view of a lobbyist registered under the Lobbying Disclosure Act of 1995, concerning particular projects, applications, or applicants for funding under the Recovery Act unless such views are in writing.” Officials are directed to inquire regarding the possible presence of registered lobbyists both upon the scheduling and commencement of phone calls and in-person conversations “with any person or entity concerning particular projects, applications, or applicants for funding under the Recovery Act.” If any registered lobbyists are detected, the directive forbids them from attending the meeting or participating in the phone call.
Not surprisingly, the American League of Lobbyists (ALL) has objected to the Obama Administrations restrictions. In a demonstration that politics does indeed sometimes make strange bedfellow, ALL has been joined by the ACLU and the Citizens for Responsibility and Ethics in Washington (CREW). In a letter to the President released Tuesday, these three groups requested that President Obama rescind the constitutionally offensive provisions of the directive immediately.
As tempting a political target as they may be, registered lobbyists have a place in our political system and rights under our Constitution. The President should heed the groups’ advice and tailor his directive to enable transparency while not muzzling any voices--including those paid to advocate.
