House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL) today wrote to U.S. Treasury Secretary Timothy Geithner as part of the committee's continuing examination of the implementation of President Obama's green energy spending plan under Section 1603 of the American Recovery and Reinvestment Act. To date, the committee's investigation has raised significant concerns over the costly grant program's failure to create jobs, and the ability of regulators to recoup funds from failed projects.??
According to Congressional Research Service testimony in June, the $9.7 billion paid out as of November 10, 2011, could result in 3,666 Construction Phase jobs per year and 355 operational jobs per year over a two-year span, or more simply, an estimated 8,042 jobs at an average cost of $1.2 million per job created. As of July 20, 2012, the program has paid out nearly $13 billion in taxpayer dollars to more than 45,000 projects.
The Wall Street Journal recently reported that the Treasury Department is planning to demand the return of more than $5 million it granted under Section 1603 to a Montana power plant that later filed for bankruptcy, Thompson River Power LLC. The committee leaders had previously requested information from Treasury regarding the jobs estimates and recovery plan for this specific grant as well as one awarded to a Utah geothermal plant, also referenced in the Wall Street Journal article as a possible Treasury target for recovery of funds. The committee had also inquired as to Treasury's procedures for recapturing funds awarded under Section 1603 in the event of cessation of production or other disqualifying acts by the recipient.
In today's letter to Geithner, Upton and Stearns wrote, "(O)n March 15, 2012, the Committee wrote to you requesting among other things, documents and communications related to any and all estimates of jobs created due to the Section 1603 program as a result of the $6.5 million grant awarded to Thompson River Power LLC and the $33 million grant awarded to Thermo No. 1 BE-01, LLC. The Committee also inquired as to what procedures were in place to enable Treasury to recoup funds from recipients that violate the terms of their Section 1603 grants.
"In its March 30, 2012 response to the Committee, Treasury asserted that "job creation is not a factor in the consideration process' for applicants under the Section 1603 program and that Treasury "does not report on the number of jobs created by the program' including, presumably, for the Thompson River Power LLC and Thermo No. 1 BE-01, LLC plants. Neither, at the time, did Treasury supply the Committee with information, as requested, detailing "all instances where either DOE or Treasury has attempted to recoup such funds and the outcomes of such attempt(s).'"
The Committee leaders continued, "In light of the Committee's earlier inquiries and reports of Treasury's ongoing efforts to recoup awarded Section 1603 grant funding from several recipients, we ask that you provide the Committee with the status of Treasury's plans to recover taxpayer dollars in these and any other instance under Section 1603."
Despite the many flaws of the Section 1603 program and its well-documented inability to create jobs, President Obama continues pressing to "double down" on the costly program and others like it. Treasury has already admitted creating jobs is not a requirement of this stimulus program, and with a meaningful estimate of the per-job cost for the first $9.7 billion at a stunning $1.2 million per job created, President Obama remarkably still wants to spend billions more.