GOP Calls for Defunding of Program to Subsidize Green Vehicles

ATVM program yet to disburse $25 billion in funds

Fisker Karma / AP
• September 18, 2013 5:50 pm


Congressional Republicans called for the defunding of a program to subsidize vehicles powered by alternative fuels following new announcements of large taxpayer losses from loans made through the program.

The Advanced Technology Vehicle Manufacturing (ATVM) program has yet to disburse about 60 percent of its authorized funds. The Department of Energy (DOE) put the program on pause in 2011 but recently announced it plans to once again begin making loans to qualifying companies.

The department announced last week that it would sell off the remaining debt owed to U.S. taxpayers by the Vehicle Production Group, which manufactures handicap-accessible natural gas-powered vehicles.

VPG received a $50 million loan through the ATVM program. The company ceased operations and laid off most of its staff in May.

The federal government is expected to lose about $42 million on the VPG deal. A department spokesman told the Washington Free Beacon that is the best return that DOE could hope for.

Additionally, DOE announced that it will also auction off the remaining balance on its ATVM loan to Fisker Automotive, a luxury electric vehicle manufacturer that has also ceased production and may declare bankruptcy.

Taxpayers are expected to lose large sums on the deal, though DOE again said selling off the balance of the loan would produce the highest returns possible.

News of taxpayer losses come just as congressional Republicans, led by Sen. John Thune (R., S.D.), are pushing to completely defund the ATVM program.

"The Obama administration has gotten into the business of picking winners and losers at a significant cost to taxpayers," Thune said in a Wednesday statement.

He called on the Senate to pass his amendment to pending energy legislation, commonly referred to as the Shaheen-Portman bill, "to eliminate the wasteful ATVM loan program."

Critics of the program have suggested that the program is drawing private funding away from more promising projects.

A 2012 report from the House Oversight and Government Reform Committee suggested that it could draw private investors to less promising ventures.

The report also faulted "the haphazard manner in which DOE is administering the program and [its] ever-changing goal posts and broken promises," which "have promoted the misallocation of scarce resources and pushed some innovative companies into bankruptcy."

Oversight noted a political dimension to the ATVM program. "It does appear that ties to the Obama administration were important for those companies securing an ATVM loan early on in the process," the report noted, citing ATVM beneficiaries Ford and Nissan.

Individuals with ties to the Obama White House also back VPG and Fisker.