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2012 Budget Cuts Funding for Energy, Conservation

2012 Budget Cuts Funding for Energy, Conservation

Tax credits for clean energy will be targeted.

Last week House Budget Committee Chairman Paul Ryan introduced his 2012 budget plan.  The plan would reduce spending by $179 billion the first year and $5.6 trillion over the next decade. Among the expenditures targeted is discretionary funding for government energy programs, which would be reduced by more than half in the 2012 budget, by two-thirds for fiscal 2013, and by 90%, to just $1 billion, by fiscal 2014. That compares with $8 billion requested in President Obama's fiscal 2012 proposal announced several weeks ago.

While details are yet to be worked out in the House Budget Committee, the plan made a specific reference to ending "welfare for energy companies" and most analysts say subsidies currently available to clean energy technologies such as wind and solar, including investment tax credits, will be targeted. In the Wall Street Journal, Ryan said the plan rolls back expensive handouts for uncompetitive sources of energy, calling instead for a free and open marketplace for energy development, innovation and exploration.

Daniel Weiss, with the Center for American Progress, says the plan maintains oil industry subsidies, while cutting valuable investments in the clean energy technologies of the future. The plan also would cut farm programs by $30 billion over 10 years, a reduction that would put considerable pressure on 2008 Farm Bill energy title programs, and slashes conservation funding by $18 billion over the next decade.

In addition to the fight over the 2012 budget, expect a serious battle in the next month over the national debt ceiling. The Treasury Department has told Congress it will hit its $14.3 trillion borrowing limit no later than mid-May and Republicans hope to use the issue to force President Obama to accept long-term deficit-reduction measures.

"The president's asked us to raise the debt ceiling and Senate Republicans and House Republicans, and I hope many Democrats as well, are going to say, Mr. President, in order to raise the debt ceiling, we need to do something significant about the debt," Senate Minority Leader Mitch McConnell, R-Ky., said on the Senate floor Friday night.

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