Stimulus cash must be spent here, not China

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It is maddening beyond belief that 79 percent of the $2 billion in renewable energy grants made under the federal stimulus program have ended up benefiting foreign companies.

Yet that is the conclusion of a recent report by the Investigative Reporting Workshop at American University.

The goal of all federal programs should be to stimulate jobs here, not in Shenyang, China.

That’s why Congress should support a bill by Sen. Charles Schumer (D-N.Y.) to restrict future grants to companies that buy the bulk of their products from U.S. firms that employ U.S. workers.

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We’re usually not in favor of buy-America provisions, and Schumer’s bill will no doubt raise howls of protest from overseas manufacturers.

But we would urge members of Congress to ask a few questions of the critics: How much of China’s economic stimulus funding has gone to U.S. manufacturers? How many workers have Japan and Germany put back to work in the U.S.?

We could find no statistics on that, but we suspect the answer to be few or none.

This issue came to a head when it was revealed that a joint U.S.-China wind-power project applied for $450 million in stimulus money as part of its funding package.

It was originally reported that the turbines would be built in Shenyang, China, and deployed in Texas.

Since then, the operators have disputed that information, claiming 70 percent of the turbine parts, including the towers and blades, will be made in the U.S.

Either way, the federal government should be scrutinizing every project to make sure it has the largest possible economic impact here at home, where the unemployment rate is hovering just under 10 percent.

The wind industry complains that these projects are planned years in advance, and that pulling this funding now would be disruptive.

That’s hard to understand, considering how the entire stimulus program has only been in effect for about a year, and most funding decisions were not made until months later.

According to a New York Times story, the renewable power industry is in Washington this week lobbying against the Schumer bill and promoting one of its own — a requirement that utilities generate a fixed portion of their power from renewables.

Congress should closely scrutinize any such requirement which could have the effect of reducing price competition and pushing up utility prices. Maine consumers have a long and rather unpleasant memory of how such requirements can push up utility rates and leave various industries uncompetitive.

A recent report called China, Japan and South Korea the “clean-tech tigers” because of the deep investments their governments are making in establishing home-grown wind and solar technology companies.

That investment will attract other money from private capital markets, including the United States.

The three countries already have a long lead over the U.S. in high-speed rail and nuclear technology.

The Breakthrough Institute reports that the Chinese, Japanese and South Korean governments will invest $509 billion in clean technology between 2009 and 2013, with China alone accounting for $400 billion.

The U.S. government, meanwhile, plans to spend only $172 billion over the same period.

It is unconscionable that U.S. economic recovery money would add to the Asian advantage.

editorialboard@sunjournal.com

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