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Republicans target technology program for disaster funds

A House GOP disaster aid bill would require cuts to the Advanced Technology Vehicle Manufacturing loan program, which has created more than 40,000 jobs in the last two years.

September 23, 2011|By Alexa Vaughn, Washington Bureau

Reporting from Washington — When the House Republican leadership drafted its disaster aid bill — now embroiled in a congressional debate threatening another government shutdown — they targeted one place to partially offset the spending: the Advanced Technology Vehicle Manufacturing loan program.

In the last two years, according to the Energy Department, the loan program has created at least 38,000 permanent jobs and 4,000 construction jobs and has been a boon to a U.S. automotive industry on the upswing both in profits and electric vehicle sales.

Ford even moved a hybrid car factory from Mexico to Michigan to qualify for the loan, which only supports expansion and retooling of U.S. manufacturing plants. Politicians close to the program say the next wave of loan recipients are projected to create another 50,000 jobs.

But whether this is the best sector to produce job and manufacturing growth is at the center of the debate on whether to pass the House Republicans' disaster aid bill. House Minority Leader Nancy Pelosi (D-San Francisco) said that in a time of need, Republicans have focused on eliminating a green jobs program instead of offering aid. They propose cutting $1.5 billion from it, less than half the cost of the disaster bill.

"They are using disaster aid to eliminate a program that initiates job growth, and that's just not right," Pelosi said. "When the next disaster strikes, we don't know where they'll go next to pay for it."

Republicans have maintained the cut is simply about dollars and common sense.

House Appropriations Committee Chairman Harold Rogers (R-Ky.) said he doubted a spending cut would affect the program's 18 pending loan applications: The program has spent less than half of the $7.5 billion it received in September 2008, and would have $2.5 billion even if the cut passed.

On Thursday, Rep. Darrell Issa (R-Vista) led a hearing called "How Obama's Green Energy Agenda Is Killing Jobs." Speakers criticized the idea of a green economy creating enough job growth to help the country get out of a recession and questioned the Bureau of Labor Statistics' vague definition of a green job.

"With unemployment at a staggering 9.2%, President Obama's green energy subsidy experiment has done little to create jobs or speed recovery," Issa said. "In fact, by many measures, it has destroyed jobs."

Issa's most prominent example is the recent collapse of Solyndra, a California solar energy company that declared bankruptcy and laid off 1,100 workers after receiving $535 million in loan guarantees from the Energy Department.

Democrats fought back, noting that in more than one instance Issa had pushed for approval of clean energy and technology loans, saying in one letter that a loan to electric vehicle maker Aptera would "promote domestic job creation throughout California as well as in other states."

Sen. Debbie Stabenow (D-Mich.) said the auto technology loan program had proved its worth and had never been involved in any corruption.

"There aren't a lot of programs where you can say, 'We're bringing jobs back to the U.S.' This is one of them," Stabenow said. "Why in the world would we zero in on a program making jobs in America? Our companies are competing with other countries — and in many of those countries they'll build the whole plant for you."

The loan program has its problems though. The Government Accountability Office found that the program was so understaffed and slow on delivering its loans that projects of smaller companies depending on the money have fallen through. For 2 1/2 years, Fiat-owned Chrysler Group LLC has waited on a pending loan application for $3 billion, and in January, General Motors Co. abandoned an effort to obtain a $14.4-billion loan.

Depending on the $4 billion left in the program are 18 pending loan applications from companies developing advanced engines, batteries and fuels for electric vehicles, a source at the Energy Department confirmed.

Stabenow said the program was on the cusp of announcing 11 loans in the next few weeks that together could create "upwards of 50,000 jobs."

The Energy Department would not release specifics about the pending loans. According to the Center for American Progress, the projected job creation count from the applications is at least 43,500, and states getting those loans would include California, Florida, Indiana, Louisiana, Michigan, Missouri and Ohio.

Rep. John D. Dingell (D-Mich.) said Wednesday on the floor of the House that as many as 10,000 of those jobs could be created by the end of the year.

Energy Department spokesman Bill Gibbons said if cuts were made, the program would have to stop loan processing and reanalyze which programs would be best to invest in, delaying the date by which applicants could hire more workers indefinitely.

alexa.vaughn@latimes.com

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