Bailout Watch 73: Regulate This

Edward Niedermeyer
by Edward Niedermeyer
bailout watch 73 regulate this

Since the $25b bailout is a done deal, it’s tempting to think of the “debate” as a fait accompli. Not so. The Department of Energy (DOE) still has to meet with lobbyists study the bill and write-up the regs. Although RF reckons the DOE won’t be rushed (that much), Motown’s white hot for the green, encouraging bailout backers to fire-off warning salvos even before the President’s signature clears the cash. As Green Car Congress reports, Senate Energy & Natural Resources Committee chair Jeff Bingaman (D-NM) is pre-threatening his pals at the DOE.

I have been told there may be some confusion about the terms of the loans as the provision creating the loan program references the “activities” that are the subject of a grant program also authorized in the same section of EISA. The grant program is limited to 30 percent of the costs of a facility. This is a fairly typical cost share for grant programs. Some have raised a question as to whether this 30 percent cap should also apply to the loan program. That is not the way I read the language of the law and was certainly not our intent in writing the provision.

Moreover, I would argue that it would dramatically limit the effectiveness of the program as it would require companies to go to tight credit markets for 70 percent of their financing, precisely the problem we were seeking to remedy with the creation of the loan program. While I don’t expect the Department of Energy to take this limited view of the program, I wanted to go on record here to help alleviate any confusion that may exist. I look forward to working with the Department to aid them in getting this program up and running.

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  • Morea Morea on Oct 01, 2008
    easier to strong arm the administrators This is harder than you might think. Career bureaucrats have nothing to fear from the likes of a Bingaman, and DoE political appointees know they will be out come inauguration time (no matter which candidate wins because the winner will fill those positions with his people). I wouldn't be surprise if many DoE political appointee positions are actually filled by career bureaucrats in "acting" positions as the political appointees flee the lame duck administration for the private sector. This is a fact of the Federal government world. Bingamen may be trying to influence the new administration's appointees but they won't be in position until March at the earliest. He may be generating fodder for appoinment hearings in the Spring. Methinks all of this will play out too late for the Detroit3. Bureaucracies don't move at the speed of buisness or politics, and sometimes for a very good reason.
  • Mel23 Mel23 on Oct 01, 2008

    From Wednesday's WSJ: But an Energy Department spokeswoman said Tuesday that Congress failed to lift several restrictions on that process, making it more difficult to meet the (60 day) timeline. She earlier estimated that it could take between six and 18 months to complete. "Congress set a timed deadline of 60 days for the regulations to be issued -- not for the loans to be made," department spokeswoman Healy E. Baumgardner said in a statement Tuesday. "Specific statutory requirements outline administrative and legal procedures which will require a longer timeframe for full implementation of the program….Congress had the opportunity waive one or more of these requirements enabling for a faster process, but failed to do so."

  • Morea Morea on Oct 01, 2008

    Ahhh, bureaucracy at work. It's lovely in its own way, isn't it? [Thanks mel23 for the post.]