Last Updated:October 23 @ 12:31 pm

House votes to end loan program that financed Solyndra

By Jim Abrams

WASHINGTON (AP) — Republicans on Friday pushed a bill through the House shining a campaign-season light on the most conspicuous failure of President Barack Obama's economic stimulus package. The bill would phase out federal loan guarantees like those that went to the now-bankrupt solar power company Solyndra LLC and left taxpayers on the hook for more than $500 million.

The "No More Solyndras Act," which passed on a mainly party-line vote, has no chance of advancing in the Democratic-led Senate and was assailed by House Democrats as an election-year stunt. The vote was 245-161.

The bill would curtail an Energy Department loan guarantee program that was the source of the more than $500 million investment in Solyndra. It was part of the $787 billion stimulus package enacted shortly after Obama took office in 2009.

The Fremont, Calif.-based company was the first renewable energy company to receive a federal loan guarantee under the stimulus, and its financial woes in the face of Chinese competition made it a target for Republican scrutiny. The company filed for bankruptcy protection in September 2011, and under its reorganization plan, taxpayers would lose almost all of their investment.

The bill would require the Treasury to review any future Energy loan guarantees made before the program expires and reaffirm that it is forbidden to "subordinate" loans so that private investors are repaid before the government is.

"I'm stunned by the cavalier manner in which the administration squandered all of these tax dollars yet says it has no regrets, no apologies, about its handling of the program," said Rep. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee. "Burning money is one source of energy that the country doesn't need."

The measure was approved by Upton's committee in early August, along with the results of an 18-month investigation by committee Republicans concluding the administration was determined to make Solyndra a stimulus success story despite evidence that it was headed for failure. The report said the Energy Department knowingly violated the law when it restructured the loan last year so as to subordinate taxpayer interests to those of private investors.

One of the private equity funds that takes repayment priority is an investment vehicle for a foundation headed by billionaire George Kaiser, a major Obama campaign contributor.

Democrats dismissed the report as partisan and one-sided and said Republicans failed to prove their argument that the loan was made for political reasons. The White House said the president strongly believed it was the right decision to invest in clean energy technologies.

"It's clear that this legislation is a political exercise," said Rep. Diana DeGette, D-Colo. "It does nothing but attempt to keep the word 'Solyndra' in the news."

Republicans pointed out that three of the first five companies that received loan guarantees under the stimulus, among them Solyndra, have gone bankrupt. Democrats said Republicans were ignoring the Energy Department successes, including saving nearly 300 million gallons of gasoline a year by supporting such projects as one of the world's largest wind farms in Oregon, a large solar generation project in California and a major photovoltaic solar power plant in Arizona.

The loan guarantee program falls under the Energy Policy Act of 2005 that was passed partly with the intention of promoting a revival of nuclear energy. The George W. Bush administration did not approve any loan guarantees and under Obama it shifted toward boosting development of innovative clean energy technology.

The legislation bars the Energy Department from issuing loan guarantees for any application received after Jan. 1 this year, leaving $34 billion in authorized money to provide financial backing to applications made before that date.

Democrats said that means the department could provide loan guarantees to older energy industries favored by Republicans, specifically nuclear and coal, while shutting out future applicants with breakthrough clean energy technology.

An amendment by the top Democrat on the committee, Rep. Henry Waxman of California, to make that remaining $34 billion available to any applicant was defeated 231-170.

Rep. Markey, D-Mass., a senior member of the committee, said the nuclear industry had pending applications worth more than $76 billion, and the coal industry almost $12 billion.

Upton responded that there is a $22 billion cap on loan guarantees for nuclear projects and that there were only six nuclear-rated applicants out of the some 50, including solar, biomass and wind, still eligible under the legislation.

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9 Comments

  1. inluminatuoComment by inluminatuo
    September 14, 2012 @ 1:59 pm

    Too late, the cow is already out of the barn and the chickens have come home to roost.

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    Rating: 4.1/5 (9 votes cast)
  2. thomasjeffersonComment by thomasjefferson
    September 14, 2012 @ 3:42 pm

    Obama will veto it, he has billions more to give to his friends and lackeys before he leaves office.

    You want to make a good loan program? Make it where if they take it they can’t write it off in a bankruptcy.

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    • catmanComment by catman
      September 14, 2012 @ 3:53 pm

      “Make it where if they take it they can’t write it off in a bankruptcy.”

      There are no “write-offs” in bankruptcy, so that is no incentive.

      But make it so the the principals are personally responsible for the money and you will see it stop over night.

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    • thecitizenComment by thecitizen
      September 15, 2012 @ 5:05 am

      Obama won’t have a chance to veto it because with Reid as Dem majority party leader in the Senate it will NEVER pass/see the light of day in the Dem controlled Senate.

      Remember that on election day and defeat any Dem senator up for reelection (starting with FL’s Bill Nelson!) and give control of the Senate back to the GOP.

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  3. sparkyvaComment by sparkyva
    September 14, 2012 @ 3:59 pm

    Government loans have no basis in the Constitution, and this is well, because the politicians view Government money as a means to reelection. Companies routinely get their loans from banks and have to meet rigorous means tests. Bankers loose their jobs for writing bad loans, Politicians rarely do. Well maybe some will loose their jobs this year…

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  4. BobinmsComment by Bobinms
    September 14, 2012 @ 4:35 pm

    Why not just no spend the $34B at all and reduce the debt??

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    • canada3dayerComment by canada3dayer
      September 17, 2012 @ 3:41 am

      because that would make sense, and we all know there’s none of that in DC! :)

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  5. middlegroundComment by middleground
    September 14, 2012 @ 4:54 pm

    The House may think they control spending, but Obama controls the printing presses and they are working overtime.

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  6. jackturner1abcComment by jackturner1abc
    September 15, 2012 @ 1:08 pm

    Why is the US Government, who has no complusion in going after someone who owes $10,000 in back taxes and with a platoon of lawyers, cannot seem to find a way to get $500 million back from Solyndra, as well as investigate the politicians and bureaucrats who made the loan possible.

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