Economic Stimulus

Floor Speech

ECONOMIC STIMULUS -- (Senate - January 31, 2008)

Ms. CANTWELL. Mr. President, I rise to speak about our need to move swiftly on the stimulus package. We are responding obviously to a bipartisan package that has come out of the Finance Committee. I believe we should work on a bipartisan basis, because we are in tough economic times, to hurry and get this package done. Doing the right thing means doing the right thing for seniors, for disabled veterans, for consumers, for business. It means getting real dollars pumped back into the economy now and not continuing to play a time-consuming game, going back and forth.

I know the House and the administration rapidly put together a package and it garnered wide bipartisan support, and I applaud their efforts for doing that. Likewise, Chairman Baucus and Ranking Member Grassley also initiated quick, bipartisan action in the Senate Finance Committee, and the bill was reported out, and Senator Reid has brought that bill before the full Senate. I urge my colleagues to keep pace with the President's request for timely action and to support sending the Finance Committee bill to the House so we can quickly move to conference and resolve whatever differences there are, so we can move a package to the President's desk we can be proud of.

Our goal is to act on policies that will stimulate the economy now and over the next 12 months. We should not lose sight of that goal. I know many of my colleagues like to talk about other proposals that may be stimulative in the long run, but for me the focus should be--and I think for my colleagues--on that which is truly going to be stimulative over the next 12 months.

The Finance Committee package makes significant improvements to the House bill. I think they are important aspects that strengthen our efforts on stimulus. The Finance Committee bill makes sure that 20 million low-income seniors and 250,000 disabled veterans are eligible for a stimulus rebate--a critical aspect to correct. Now I don't think the House of Representatives intended to leave these folks behind, and I think we can simply send a message to the House and the President that we know they support including these individuals as well.

By making sure that seniors qualify for these payments, in my State, over 800,000 Washingtonians will be helped, and over 93,000 disabled veterans and their families. So we are talking about a large percentage of the population. These people live on fixed incomes, and it is essential we provide them the economic assistance they deserve. I do want to congratulate Senators Lincoln and Snowe for highlighting the fact that the House bill failed to help these individuals--disabled veterans--and worked to correct this in the Finance Committee package.

The Finance Committee package also improves upon the House bill by including a modest temporary extension of the stimulative energy tax credit and investment provisions. Some may ask: Are these energy provisions stimulative? Let me respond clearly: Extending these provisions is critical to the prevention of billions of dollars of investment loss and thousands of jobs lost in 2008. We need to act quickly or we are going to not only lose out on a positive economic stimulus that can be upwards of $20 billion, but people will start cancelling projects that are in critical areas of investment simply because we have not given them the predictability of the Tax Code.

This bill includes a 1-year extension of expiring clean energy and efficiency tax credits that will help consumers and businesses make stimulative investment decisions in 2008, and it happens to address one of the most pressing needs--energy costs--that are causing impact to our economy today. Extending this package of incentives now will enable companies to go forward with more renewable investments in wind and solar which are currently on hold now because they are waiting for the certainty of the Tax Code.

I wish to show my colleagues an example of what uncertainty does for our investment. Historically, the production tax credits have been renewed at various points in time. When Congress has failed to give predictability--and this chart shows the megawatt production, the years we failed to provide certainty--we actually saw a 93-percent drop in 2000. In 2001 when we failed to get certainty again, we saw a 73-percent drop in production, and in 2004 we saw a 77-percent drop in production again. What this chart shows us is that in 2007, we are off to a great year as it relates to production, and the production tax credit and the alternative energy that we are producing.

As I said, 2000 shows almost $20 billion in stimulation to our economy by our investment in energy. That helps us lower energy costs and certainly puts more production into the mix. But if we fail to give the businesses the predictability we are going to extend these tax credits, those investments aren't going to be made.

The American Wind Energy Association estimates that the extension of the production tax credit will enable $7 billion in capital spending to go forward over the next 12 months, thanks to projects and contracts that will be executed as planned rather than delayed because of uncertainty of the place-in-service date. That is, by saying the projects have to be in place by the end of this year does not give them the predictability of continuing to make the investment. We have been told by just one appliance manufacturer that they will not give the go-ahead on $30 million in investment in 2008 to put new energy efficiency appliances into production unless the tax credit is extended. That production line won't be cost-effective without it. That is what they tell us.

Also, the extension of the investment tax credit for solar, for example, means that one large grocery store chain in the United States would--if they got the credit--inject an additional $30 million into the economy by following through on their plan to retrofit more stores with solar panels in 2008. Each solar conversion of those stores puts $2 million into the economy, into manufacturing and installation of those solar panels. The Federal investment credit is key to whether they move forward with their investment, or whether they stop or slow down. Overall, the solar industry estimates that up to 40,000 new jobs will be lost in the next 12 months if we don't extend the investment credit. At this time in our economy, why should we be sacrificing high-quality jobs because we aren't giving certainty predictability?

Let me give an example. In my own State, someone called our office today who is the president of Wellons, Inc., in Vancouver, WA. For more than 40 years Wellons has been a leader in providing wood-fired energy systems, lumber-dried kilns, and related products to the forest industry. Wellons has four to six projects and maybe many more that are ready to go, and yet a key to all these projects moving forward is certainty about the production tax credit. If the production tax credits aren't extended, these projects can't go forward, and as the president of that organization told my office:

Every project I have hinges on the production tax credit. If they aren't extended, we will start having to lay off some of the 500 employees in the company.

So we have to act quickly. There are many other States that will be impacted besides mine. A report that was released today by Navigant Consulting found that over 100,000 jobs are at risk. In fact, their report shows State by State that due to a lack of production tax credit--Texas, for example, 23,000 jobs could be at stake; Colorado, 10,000 jobs; Illinois, 8,000--and I am not giving the exact number here; I am rounding them up or down--Oregon, 7,000 jobs; Minnesota, 6,000; my home State of Washington, 4,744; and the list goes on. Iowa, North Dakota, Oklahoma; Pennsylvania will lose 1,500 plus jobs; California, nearly 1,000 jobs; Missouri, nearly 1,000 jobs, and on and down the list.

So the question is whether we are going to act to pass what is a bipartisan Senate bill that improves on the House package--it improves on the House package including seniors, including disabled veterans, in making sure we are clear about who--in fact, that legal citizens get access to these rebate checks, and to make sure we are truly making the best decision about stimulative investment.

Now, I wish that last year we could have had some of these things pass and having some clarity. But it is clear that the House of Representatives and the White House see this differently. So it is very important that we take the opportunity now to get this investment strategy right. Doing these tax credits at the end of this year is not sufficient to keeping investment. If we don't, 2008 is going to look more like 2004. That is that in 2008, people will cancel projects, stop production, we won't have the energy produced in the marketplace.

This is a large opportunity for us. It is a large opportunity to give businesses--and I should say it also gives consumers--an opportunity to get about $500 from a tax rebate for their consumer energy investments into products that will help them keep their energy costs down, and the estimates are that individual consumers, besides the $500 rebate they will get, will probably save between $600 and $800 on energy savings. Those are the kinds of things we want to do. We want to see 2008 look even more aggressive from a stimulative perspective than 2007. We want people to be aggressive in this area because not only will it create jobs, not only will it create economic stimulus now, but it will help consumers on the key impact they are feeling in this economic hardship of high energy costs. The more production you get into place, that production helps us in lowering energy costs. Getting more alternative energy production helps us in impacting the cost of natural gas, because you have an alternative product in the marketplace. It helps us in getting other supply. It certainly is supply that is there for the long run. I don't think anybody thinks we are ever going to change the direction we are currently seeing on high energy costs, so getting the long-term production in place is also a good idea.

But I urge my colleagues to think clearly about this choice we are going to have; that is, to improve upon the, I am sure, unintended consequences the House had in their package by clarifying that seniors and veterans deserve to have these benefits, and that these production tax credits and investments are smart investments to give business predictability and will be stimulative to our economy. Certainly by ignoring that, we are at peril of making our problems worse. So I encourage my colleagues to support this Finance Committee package that has come out in a bipartisan way and move quickly with the House to resolve these issues.

It is the quickest path forward to getting a bill to the President and getting checks into consumers' hands.

I yield the floor.

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