Clean Car Loan Program Adds Fuel To Shutdown Fears

The once rare possibility of a federal government shutdown has reared its head again — this time over House Republicans’ desire to offset spending for disaster relief with money for other, unrelated projects.

A clean car loan program has become a key battleground. The House spending bill would take $1.5 billion from the program for disaster relief. Democrats say that would be a huge mistake.

The Advanced Technology Vehicles Manufacturing (ATVM) program was created by Congress and President Bush in 2007. The program lends companies money to retool their plants to manufacture clean car technologies. It received bipartisan support, and according to the Department of Energy, it has saved or created 39,000 jobs — most of them at Ford.

The company’s state-of-the-art Michigan Assembly Plant reopened in May with help from the loan program. It used to produce SUVs; now it’s set up to assemble the Ford Focus.

“These retooling loans made it possible for Ford Motor Company to save 1,900 jobs at their Michigan Assembly Plant in Wayne, Mich., so they could build the all-new Ford Focus electric and the battery electric Ford Focus in America,” says Sen. Debbie Stabenow, who represents Michigan.

Ford officials say 11 plants in five states benefited from the program. The company even moved a hybrid battery facility from Mexico to Michigan to take advantage of it.

Four other companies have received more than $2 billion in loans through the program so far.

Stabenow took to the Senate floor Friday to protest the proposed cuts.

“To me it is outrageous that the House of Representatives — the Republicans in House — have included a job-killing offset to pull a rug out from and put up to 50,000 American jobs at risk,” she says.

That’s not how House Republicans see it.

“We’re doing everything that we can to find every dollar that we possibly can to insure that our fellow Americans who are suffering due to these disasters are able to have the resources that are necessary,” says Rep. David Dreier, whose district is in Southern California. “Of the $1.5 billion which is utilized in the offset, it’s been sitting in the coffers for three years.”

Dreier and other House Republicans insist that even disasters shouldn’t get funding without cutting spending from somewhere else. They also say this advanced vehicles technology program is a fine place to cut because the program has spent less than half of the $7.5 billion it received three years ago.

“So to act as if somehow we’re going to see some great loss of jobs is, again, a mischaracterization of what is happening. We’re establishing priorities,” he says.

Dreier was one of more than a dozen Republicans who voted to cut funding to the program — yet also in recent years sent letters to the Department of Energy pushing for clean car projects in their own states. The letter Dreier signed suggested a California company would create more than 2,300 jobs making lithium ion batteries if it got the money.

Rep. Norm Dicks (D-Wash.) said on the House floor there are 18 loan applications in the pipeline now that could create another 50,000 jobs.

“Some of these jobs will be at risk because of this offset. This is not the time to put American manufacturing jobs at risk,” Dicks says.

It’s not just Democrats in Congress who are saying this. The U.S. Chamber of Commerce sent a letter to the House highlighting the value of the program. The National Association of Manufacturers sent letters too. Chip Yost, a vice president for the association, says they’re trying to spread the word that they support the program.

“We just think these are the kinds of programs and partnerships that work really well between business and government,” he says, “and we think that this is a program that’s in place, it’s operational, and we’d like to see it continue to move forward.”

Just how much money the loan program has going forward will depend on what happens in Congress next week.

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