On March 3, Sens. Charles Schumer (D-N.Y.), Sherrod Brown (D-Ohio) and Bob Casey sponsored an amendment to the stimulus – which they’ve dubbed the “American Renewable Energy Jobs Act” – in direct response to the investigative report “Blown Away” that I wrote for the Investigative Reporting Workshop.
The legislation – and a request that the administration impose a moratorium on all new Section 1603 renewable energy grants until the legislation is passed – have caused a certain amount of consternation among some of the lobbying groups affiliated with the industry. (Interestingly, the labor groups that would stand to gain workers, and who do their own fair share of lobbying, are mostly lining up behind Schumer.)
So what does the legislation say? It has three main points:
1.) Discretion: The way Section 1603 of the American Recovery and Reinvestment Act is currently written, there is no discretion when it comes to granting money. The text of the current law(pdf) is actually quite simple – if you built a renewable energy facility within a certain time frame, and you can prove that to the Department of Energy, the Treasury will cut you a check for 30 percent of your legitimate costs. Within seven days of being awarded a grant, the money is deposited in your account – no matter who you are or what you plan to do with it.
So, if you submit an application and you spell your name right – you get the money. The government has no choice.
The proposed amendment changes the words, “Upon application, the Secretary of the Treasury shall,” to: “Upon application, the Secretary of Treasury may…” In theory, that one-word change would mean filling out the application correctly doesn’t guarantee a grant – if the Treasury thinks there is a good reason to stop the grant, they’d have the power.
2.) “Buy American”: One of the most common questions I get about my article is: “What about ‘Buy American’? Doesn’t that apply?” The answer is, no. The stimulus bill’s “Buy American” package requires the iron, steel and manufactured parts in a project be American-made, but applies to public works projects. These grants are actually fairly complicated financial mechanisms that are being granted in lieu of tax credits – they are in a totally different realm. And to be fair, that’s not because of a loophole written into this law – “Buy American” provisions existed in federal legislation long before the stimulus and programs like this one were exempt before.
Schumer’s proposed amendment would alter that.
The American Wind Energy Association, an industry lobbying group supported by many of the foreign companies we named in our report, has raised a concern that requiring turbines purchased with grant money through this program be 100 percent American-made would kill the industry and put as many as 50,000 out of work. If only the “Buy American” provision were that airtight. It’s not a secret that the “Buy American” provision as it exists in the ARRA is defanged – it can be sidestepped if the head of the federal agency in charge of the program determines buying American would:
- “inconsistent with the public interest.”
- the iron, steel or manufactured materials are, “not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality.”
- Or, “inclusion of iron, steel, and manufactured goods pro- duced in the United States will increase the cost of the overall project by more than 25 percent.”
So, basically, if you have a really good reason why it would hurt America to buy American… or if you can’t find the product you’re looking for here in America… or it would cost a lot… you don’t have to. And agency heads have been granting waivers of the “Buy American” provisions with relative ease and quite broadly. But, when they do, they’re required to post a notice in the Federal Register.
The reality is “Buy American” doesn’t impose draconian restrictions, but it does require notification and some light explaining if you choose to sidestep it. (The full text of the ARRA’s “Buy American” provision.)
3.) Accountability: Beyond the relatively light level of accountability that would come with a “Buy American” provision, Schumer’s legislation would also require the Treasury to do some job count math before issuing a check. Instead of just checking off that the applicant has a renewable energy facility built in the appropriate time frame, the government would have to count the jobs preserved or created domestically. As I understand it from reading the proposed legislation, the result of this analysis wouldn’t alter an applicant’s ability to get money, but it would require the person signing the check to be aware of where the jobs are being created. And then report back to Congress on those numbers.
For more:
