Rep. Mike Pompeo (R., Kan.) has introduced a bill to repeal all federal energy tax credits, calling them bad energy policy and a roadblock to lower energy rates for consumers.
Pompeo on Tuesday introduced the Energy Freedom and Economic Prosperity Act, a bill he said is “aimed at the simple thought that the federal government ought be a lot less involved in picking and choosing energy sources.”
The bill would end more than two dozen federal tax credits that currently benefit wind energy, cellulosic biofuel, and alternative fuels as well as investment tax credits for equipment powered by solar, fuel cells, geothermal, and other energy sources.
The congressman stressed that his bill was not targeting just renewable energy but all energy tax credits including traditional fossil fuels. The result, he said, would be lower energy rates for consumers and a level the playing field for the energy market.
“This is not about wind,” Pompeo said. “This is not about solar. This is about good energy policy and good tax policy.”
“I believe in the ethanol producers, and I believe in wind producers,” Pompeo said. “I am confident that some one or all of those energy sources will make it. They don’t need to lean on the taxpayer to support them.”
Pompeo also said his bill would be revenue neutral and provide comparable reductions in tax rates for every dollar generated from tax credit repeals.
Pompeo’s bill has garnered the support of a host of free-market groups such as Americans for Tax Reform, Club for Growth, Americans For Prosperity, and the American Energy Alliance.
“Not only is this good for energy policy, but it’s a signal to the Washington establishment that things need to change,” said Tim Chapman, Heritage Action for America’s chief operating officer.
Fiscal hawks such as Sens. Marco Rubio (R., Fla.) and Rand Paul (R., Ky.), as well as House Budget Committee Chairman Paul Ryan (R., Wis.), supported nearly identical legislation introduced by Pompeo in the last session of Congress.
However, while the bill has conservative bona fides and stands a good chance of making it through the House, it will face a much tougher road through the Democratic-controlled Senate.
The wind energy lobby not only successfully defended its production tax credit (PTC) in 2012 from a concerted conservative effort to let it expire, but the PTC was expanded as part of the last-minute “fiscal cliff” deal hammered out by Congress.
Fiscal hawks in the Senate would also have to contend with Republican and Democratic legislators who fiercely guard subsidies to their constituents.
“Hard work and education are what I can commit to,” Pompeo said. “How far we can get remains to be seen.”