Senator Al Franken’s Shakedown Undermined Energy Secretary Chu’s Defense

by William Yeatman on February 16, 2011

in Blog, Features

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Energy Secretary Steven Chu today testified before the Senate Energy and Natural Resources Committee on the Obama administration’s  budget for the Department of Energy (DOE). Despite the fact that the DOE has yet to spend $21 billion in stimulus money (about 60% of its 2010 budget), the White House proposed a 12% budget increase.

Minnesota Senator Al Franken was unconcerned with the deficit implications of giving billions more taxpayer dollars to a bureaucracy that has yet to spend the billions of taxpayer dollars it already has. Instead, he had a much more parochial matter in mind.

His line of questioning for the Energy Secretary focused on Sage Electrochromic, a Minnesota-based window manufacturer. Senator Franken explained that the window company had received a $70 million loan guarantee from the Department of Energy, which you’d think would be  pleasing to the Senator. After all, a federally backed loan is a taxpayer subsidy that allows recipients to obtain better financing.

Yet it wasn’t generous enough for Senator Franken. He noted that the company was still on the hook for the credit subsidy cost, which is (roughly speaking) the value of the risk that the government undertakes by backing the loan. Point blank, the Minnesota Senator told Secretary Chu, “I’d like to get this credit subsidy cost waived.”

Is this not a shakedown?

The primary Republican talking point for today’s hearing was that the government should not be picking and choosing winners and losers in the energy industry. Secretary Chu vigorously denied this accusation; Senator Franken proved it.

cbullitt February 16, 2011 at 11:08 pm

Awesome.

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