Trump Set to Slash Energy Subsidies, But Hankers After Coal

This article first appeared on the Cato Institute site.

As we near the release of President Trump's new budget, some of his proposals are leaking to the press.

The Washington Post reports that the president will propose cutting renewable energy and energy efficiency subsidies by 72 percent. That would be a good start, although 100 percent would be better.

Spending for the Energy Department's Office of Energy Efficiency and Renewable Energy (EERE) is set at $2.04 billion for the current fiscal year, which ends Oct. 1.

Last year, the administration asked for $636.1 million, a decline of more than two-thirds, although Congress did not implement the request. For 2019, the administration's draft proposal would lower that request even further, to $575.5 million.

We will see whether Congress goes along, but the story does show that, so far, Trump is siding with his conservative budget director, Mick Mulvaney:

The Energy Department had asked the White House for more modest spending reductions to the renewable and efficiency programs, but people familiar with the process, who spoke on the condition of anonymity to share unfinished budget information, said the Office of Management and Budget had insisted on the deeper cuts. …

"It shows that we've made no inroads in terms of convincing the administration of our value, and if anything, our value based on these numbers has dropped," said one EERE employee…"

Apparently, the White House budget office has concluded, as I have, that energy subsidies are a waste of money.

Roger Garbey, from the Goldin Solar company, installs a solar panel system on the roof of a home a day after the Trump administration announced it will impose duties of as much as 30 percent on solar equipment made abroad on January 23, 2018 in Palmetto Bay, Florida. Daren Goldin the owner of the company said, 'the tariffs will be disruptive to the American solar industry and the jobs they create.' Joe Raedle/Getty

There is more good news from the Post :

The draft document says the administration will once again ask Congress to abolish the weatherization program … The budget proposal would also eliminate state energy grants.

The budget would ax research in fuel efficient vehicles by 82 percent, bioenergy technologies by 82 percent, advanced manufacturing by 75 percent and solar energy technology by 78 percent.

The proposal would cut funds for electric car technologies and fuel-efficient vehicles—at $307 million currently the biggest of the program areas—to $56 million in 2019.

… The plan would also chop spending on more efficient building technologies and research into geothermal, hydro and wind power.

These cuts would be splendid, and straight from the playbook.

Nonetheless, there has been some bad news on energy policy. Energy Secretary Rick Perry has tried to aid coal and nuclear at the expense of electricity consumers. Also, the administration supports the ethanol boondoggle, and it just imposed special taxes on solar panels.

As for the president, he has been talking nonsense about "beautiful clean coal."

Still, I'm looking forward to the spending cut proposals in the budget to be released February 12.

Chris Edwards is the director of tax policy studies at the Cato Institute.