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For GOP, death of manufacturing loan program finally in sight

Ryan McCrimmon, CQ-Roll Call on

Published in News & Features

WASHINGTON--One way or another, the Energy Department's direct loan program for fuel-efficient car manufacturers looks destined for the chopping block.

Once viewed as a lifeline for Detroit's "Big Three" manufacturers facing economic headwinds even before the onset of the Great Recession, the program is now little more than a kitty of untapped funds appropriated a decade ago. The last major Advanced Technology Vehicles Manufacturing program loan was approved conditionally in 2015, but Arconic Inc., whose former parent Alcoa secured the loan to produce lightweight vehicle materials at its Tennessee plant, turned the money down last year.

No new loans have closed since 2011, and with $4.33 billion sitting around unspent, the Trump administration wants to "rescind," or cancel, the vehicle loan funds permanently. The House is set to consider a measure that would drain the loan account and 37 other line items -- $15.2 billion in all -- likely next week. The path is trickier in the Senate; despite procedural protections expected to lower the vote threshold to a simple majority, few if any Democrats are expected to support the bill, and some Republicans are wavering as well.

For Senate Energy and Natural Resources Chairwoman Lisa Murkowski, lack of interest in new loans means there's no longer a need for the money. "I have said before that I don't have a problem with the rescission of the ATVM because you've got a program that hasn't done anything for seven years now. So for me, that makes sense," the Alaska Republican said late last week.

A problem for lawmakers, however, is that the unspent funds -- provided as a "subsidy appropriation" in 2008 to cover the potential cost of anticipated defaults -- represent a pool of money to offset other things.

Two of the original program's boosters, Michigan Democratic Sens. Debbie Stabenow and Gary Peters, sought to use some of the money in 2016 to clean up contaminated water supplies in Flint, Mich. They successfully incorporated a bipartisan provision to pay for the costs by phasing out the loan program by Oct. 1, 2020, in an early version of that year's water resources authorization bill, though the offset was stripped before the measure became law.

Aides to Stabenow and Peters did not respond to requests for comment.

When a group of GOP senators in 2016 tried to attach the same phase-out provision, though without Flint funding, during amendment debate on the fiscal 2017 Energy-Water spending bill, the effort was defeated on a narrow 48-49 vote.

Five Republicans, including Murkowski, joined all Democrats except Claire McCaskill of Missouri to oppose the effort. Senate Energy-Water Appropriations Subcommittee Chairman Lamar Alexander, with the Alcoa loan pending, also opposed the GOP amendment at the time. His office did not respond to requests for comment.

Many Republicans have made no secret of their desire to cut the program, even if mainly to offset other spending. In 2011, Congress approved a stopgap funding bill that included $2.65 billion in emergency aid for various natural disasters that year. Initially, the House passed a version rescinding $1.5 billion from the vehicle loan program to cover much of that cost, but the offset was stripped in final House-Senate bargaining.

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