“YES” on the McClintock-Kucinich Amendment

This week, the House will vote on the McClintock-Kucinich Amendment to the Energy and Water Appropriations Bill (H.R. 5325). The amendment would block all future loan guarantees under Section 1703 of the Title 17 loan guarantee program.

Section 1705 of the program (which provided loan guarantees from the stimulus to failed companies like Solyndra) may be defunct, but Section 1703 still exists. Loan guarantees either put taxpayers on the hook for projects that the private sector won’t support or needlessly subsidize projects that it will.

Programs like Title 17 are primarily requested by companies that cannot survive without government handouts, as Heritage’s Nick Loris explains:

“There are two kinds of companies that seek loan guarantees: (1) those that are economically uncompetitive, and (2) those that can be competitive. The former need loan guarantees to stay alive. But as we’ve seen with Solyndra, even they will eventually fail. For those that can be competitive, loan guarantees are nothing more than handouts that pad their bottom lines. Neither case can be justified.”

The McClintock-Kucinich Amendment would help protect taxpayers, ensure that the government has one less tool to pick winners and losers in the market, and begin the process of restoring the free-market. Importantly, the amendment has no impact on any loan guarantees completed before fiscal year 2013, but it would prevent new guarantees moving forward.

Heritage Action supports the McClintock-Kucinich Amendment and will include it as a key vote on our scorecard.

Related Links:
Heritage Action’s Scorecard
Congress Should Scrap the Energy Loan and Loan Guarantee Programs
No Loan Guarantee, No Nuclear? Not Quite
The Problem with Increasing Energy Loan Guarantees
Loan Guarantee Report Neglects Central Question: Why Loan Guarantees?