The wrong way to pay for Medicaid and teachers' salaries

By 1Sky intern Amy Plovnick. -- Luis

Last Tuesday House of Representatives took a break from their 6-week recess to pass an emergency state aid bill that provides $16.1 billion in Medicaid funding and $10 billion to pay teachers’ salaries. The bill passed 247 to 161, largely along party lines with the Democrats voting in favor. It is fortunate that House members returned to Washington from their vacations to pass this critical spending measure.

What is not so fortunate is the fact that in order to help pay for the spending, a provision was included in the bill that cuts $1.5 billion in renewable energy loan guarantees. This cut comes in addition to the $2 billion that was cut from the program last summer to pay for the cash-for-clunkers program. Together, the cuts represent over half of the $6 billion that was originally allocated for the Department of Energy (DOE) program, which gives the renewable energy industry the cash flow necessary to bring expensive new projects to the market and hastens the transition to a clean energy economy.

Renewable energy and environmental groups have decried this spending cut, and are urging Speaker Pelosi to restore the funding. As Al Gore lamented,

These rescissions put into jeopardy the green jobs that the administration have touted as part of our clean energy future and put us further behind the rest of the world."

In a letter to Speaker Pelosi (.pdf), the Solar Energy Industries Association, the American Wind Energy Association, and others maintained,

These two cuts will significantly undermine the DOE Loan Guarantee Program. Failure to act on the Treasury Grant Program and other tax incentives or to restore funding to the DOE Loan Guarantee Program will jeopardize the renewable energy industries' efforts to develop clean electric generation and create tens of thousands of jobs.”

Speaker Pelosi responded that she and the Obama administration will work to restore the funding. Her spokesperson said,

The Speaker has been assured by the Obama Administration that it will work to restore these funds so that loans planned for later this year can move forward.”

Senate Majority Leader Harry Reid has also urged Obama to come up with a plan to restore the funds. Although the Obama administration has said that there is still enough money for the loan guarantee program to fund energy projects that are in the works as well as some additional projects, it has not come out with a plan for how to restore the funding.

Funding teachers’ salaries and paying for Medicaid is extremely important, but it should not come at the expense of creating green jobs and transitioning to renewable energy. Obama, Pelosi, and Reid should work together to fully restore the funding for the renewable energy loan program as quickly as possible.