Tax credits and loans exceed $4 billion promise
As a candidate, Barack Obama said he would provide $4 billion in tax credits and loan guarantees for American auto companies to build fuel-efficient cars. As part of the promise, Obama said the tax credits and loans would help employ American workers.
The Advanced Technology Vehicles Manufacturing Loan Program is the product of a 2007 law, but it didn't award loans until 2009, under Obama. Five projects have received this kind of loan from the Energy Department, amounting to about $8.4 billion in assistance. The loans help finance the production of vans that run on compressed natural gas, electric-vehicle battery packs, electric motors, and two types of plug-in hybrids. Also, the campaign promise called for building fuel-efficient cars in the United States and all of these projects take place in American facilities.
One caveat: Since these are direct loans, they do not leverage financing from a third party, as a loan guarantee might. But they do encourage investment in the fuel-efficient car industry. A separate Energy Department loan program -- the one that famously subsidized the solar company Solyndra -- provides a $132 million-loan guarantee for the development of a cellulosic ethanol facility, which would produce transportation biofuels. Relative to other Energy Department loans, it's not much money, but it does meet the letter of Obama's promise about loan guarantees.
That covers Obama's promise for loans, but what about tax credits? The American Recovery and Reinvestment Act, better known as the economic stimulus, provided $2.3 billion in tax credits for investment in advanced energy manufacturing. The government has assigned that money for 183 projects, with recipients such as the American branches of Volkswagen, Honda and Mitsubishi, as well as lesser-known fuel-cell manufacturers, biofuel facilities and electric-vehicle auto plants.
Obama's campaign promise mentioned employing American workers and this tax credit program used domestic job creation as part of its selection criteria.
We also think it's worth noting that the federal government provides tax credits on buying hybrids and alternative-fuel vehicles. Those tax incentives are supposed to increase consumer demand for fuel-efficient vehicles, which might in turn spur production of fuel-efficient cars.
On the campaign trail, Obama said he would provide $4 billion in tax credits and loans for American production of fuel-efficient cars. He exceeded this goal by far. We rate this a Promise Kept.
BarackObama.com, Barack Obama and Joe Biden: New energy for America, accessed on Aug. 3, 2012
Bloomberg Businessweek, Bloomberg View: Incentives for Car Buyers, Not Carmakers, July 19, 2012
WhiteHouse.gov, Fact Sheet: $2.3 Billion in New Clean Energy Manufacturing Tax Credits, Jan. 8, 2010
U.S. Department of Energy, Energy Efficiency and Renewable Energy, DOE Awards $8 Billion in Loans for Advanced Vehicle Technologies, June 24, 2009
Gannett News Service, Tax credits bring costly green cars a little closer to buyers' reach, March 14, 2011 (subscription)
USA Today, Cuts 'temporary' in name only; Expiring reductions plentiful in tax code, and most extended year after year, Dec. 8, 2011
U.S. Department of Energy, Loans Program Office, Our Projects
Project Vote Smart, Remarks by President Barack Obama at Newton, Iowa, April 22, 2012
Automakers get grant money to build efficient cars
Part of President Barack Obama's environmental agenda involves improving fuel efficiency in cars.
Besides a major overhaul of car efficiency standards , the Obama administration has doled out money to car manufacturers and suppliers meant to help the ailing domestic industry overhaul facilities and processes to make more efficient cars.
Case in point: In August 2009, Obama announced $2.4 billion in stimulus package grants for better car batteries, plug-in hybrid technology and workforce training, among other things. For example, some of that money went to Navistar International Corp. in Elkhart, Ind., to make electric trucks.
So, Obama has clearly been subsidizing efforts to aid manufacturers of fuel-efficient vehicles. But so far, we've not seen an effort as specific as loan guarantees and tax credits. We'll keep an eye on this, but call it In the Works.
The White House, 24 Billion in Grants to Accelerate the Manufacturing and Deployment of the Next Generation of U.S. Batteries and Electric Vehicles , accessed Dec. 1, 2009