-- The Obama administration said Thursday it isn't shutting down its $25 billion Energy Department auto retooling loan program, despite the fact that it hasn't made a new award in more than two years and has no pending applications.
This week, the Republican-led U.S. House rejected an amendment that would have eliminated the $6 million in funding to staff the office that oversees the $25 billion Advanced Vehicle Technology Manufacturing program.
Rep. Rodney Frelinghuysen, R-N.J., said cutting the funding "would hurt federal oversight of the more than $8 billion in loans already given. As our committee report states, there are no new applications for this program, and the Department of Energy doesn't expect any. The committee recommendation includes the $6 million as a reasonable amount to provide oversight and direction to the existing loan portfolio and no more."
The proposal was part of the $30.4 billion House-approved funding for the Energy Department and water projects. It cuts about $1 billion from the Energy Department, much of it from the office that funds auto research and other advanced energy research programs.
Aoife McCarthy, an Energy Department spokeswoman, said the government is still accepting applications. "The Department of Energy's Loan Program has more than $15 billion in loan authority available, and we welcome new applications," she said.
Rep. Paul Broun, R-Ga., had argued for scrapping the office, but his amendment failed 165-252. "Since 2008, the U.S. government has been in the business of lending money to build cars that no one wants to buy," Broun said. "I'm 100 percent supportive of the automobile industry producing more fuel-efficient automobiles. However, there's simply no good reason that the federal government should be subsidizing billion-dollar companies at a time when our nation is broke."
Unlike 2011, when House Republicans voted to cut $1.5 billion out of the $7.5 billion subsidy set aside for the program, but agreed to drop the cuts after strong opposition from Democrats, no effort was made to trim the unused loan authority.
The White House opposed the House Republican bill, citing cuts to vehicle research. "The Republican bill would leave U.S. competitiveness at risk in new markets for clean energy industries such as advanced vehicles, advanced manufacturing, energy efficiency for homes and businesses, and domestic renewables," the White House said.
The auto loan program has struggled. In February, Vehicle Production Group LLC -- a Michigan-based startup automaker building handicap-accessible compressed natural gas vehicles that won $50 million in loans in March 2011 -- suspended production.
Another recipient of $529 million in loans, Fisker Automotive Inc., saw its Energy Department reserve seized by the government and saw the government rescind about $300 million of the loan. It hasn't been able to build a vehicle since last July and has been searching for a buyer as it tries to avoid bankruptcy.