Though Congress is in recess until after Labor Day, much debate is underway over what cuts the 12-member Joint Special Committee on Deficit Reduction will recommend. Tens of billions of dollars of energy subsidies, including clean energy loan guarantees, tax credits for solar and wind industries, and incentives for oil and gas companies, will be scrutinized as the committee identifies as much as $1.5 trillion in deficit reduction measures by the end of November.
According to an August 1 Energy Information Administration report, federal energy subsidies totaled $37.2 billion in 2010, an increase of more than $19 billion from 2007. The renewable energy industry specifically received more than $14.6 billion in subsidies in 2010 from a combination of direct and tax expenditures, research and development spending, loans, and loan guarantees. Several of the Special Committee members are likely to pay particularly close attention to energy spending, including Senator Rob Portman (R-OH, a member of the Senate Energy and Natural Resources Committee, Senator Patty Murray (D-WA), who serves on the Senate Appropriations Subcommittee on Energy and Water, and Congressman Jeb Hensarling (R-TX), whose home state accounts for nearly 30 percent of national oil production.
While the Special Committee initiates its debate, House Appropriations Committee Chairman Hal Rogers (R-KY) said last week that he plans to finish the 2012 appropriations process as soon as possible. The highly debated Interior-EPA spending bill was delayed last month amid disputes over the debt ceiling.
On the Administration front, the Office of Management and Budget released a memorandum last week directing all agency heads to submit 2013 budget requests that are five percent below 2011 enacted discretionary levels. The cuts must be targeted, and not made via across-the-board reductions, and agencies must also provide a list of additional funding reductions that would bring the upcoming request to 10 percent below 2011 levels.
At the same time, President Obama announced last week that he will unveil a jobs plan in early September. The plan is likely to be fairly broad, may include a highway bill and national infrastructure bank, and is expected to dovetail with Senate Majority Leader Harry Reid’s anticipated jobs agenda. Majority Leader Reid’s plan may include a highway bill, national infrastructure bank, patent reform, and energy legislation.