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Obama’s Solyndra shuffle

at 06:00 AM ET, 03/23/2012


(JASON REED/REUTERS)

“Obviously, we wish Solyndra hadn’t gone bankrupt. Part of the reason they did was because the Chinese were subsidizing their solar industry and flooding the market in ways that Solyndra couldn’t compete. But understand: This was not our program, per se. Congress — Democrats and Republicans — put together a loan guarantee program because they understood historically that when you get new industries, it’s easy to raise money for startups, but if you want to take them to scale, oftentimes there’s a lot of risk involved, and what the loan guarantee program was designed to do was to help startup companies get to scale.”

— President Obama, interview with American Public Media’s “Marketplace,” March 21, 2012

“We can see the positive impacts right here at Solyndra. Less than a year ago, we were standing on what was an empty lot. But through the Recovery Act, this company received a loan to expand its operations. This new factory is the result of those loans… Before the Recovery Act, we could build just 5 percent of the world’s solar panels. In the next few years, we’re going to double our share to more than 10 percent.”

— Obama, remarks at Solyndra Inc., Fremont, Calif., May 26, 2010

Success has a thousand fathers. Failure is an orphan.

We were reminded of that aphorism when we saw Obama’s comments this week regarding the origin of the government loan program that funded now-bankrupt Solyndra. What was once touted as an administration achievement is now cast as a bipartisan effort that preceded Obama — in effect, the reverse of that aphorism.

Which is it? As it happens, there is a bit of a fact-checker dispute on this matter, with Politifact saying it mostly started under George W. Bush and Factcheck.org arguing that the administration is parsing its words because the loan to Solyndra was funded through Obama’s stimulus bill. So Obama’s statement gives us an opportunity to weigh in on the matter.

The Facts

The Energy Policy Act of 2005, signed into law by Bush, under section 1703 of Title XVII, included loan guarantee funding to promote innovative clean energy technologies. Solyndra had applied for a loan under 1703, but no loans were made by the time Bush left office.

In 2009, the American Recovery and Reinvestment Act, better known as the stimulus, added a new section — 1705 — which offered a more attractive loan package because it did not include credit subsidy fees. Solyndra ended up receiving a $535 million loan under section 1705 — not the original section 1703 program crafted during the Bush administration.

According to a White House e-mail dated Oct. 14, 2009, obtained by congressional investigators, officials viewed Solyndra as a key element in “supporting the president’s manufacturing strategy.” The e-mail added: “The Administration’s combination of loans, grants, tax credits and mandates will help the United States regain its position as the world leader in manufacturing clean energy equipment.”

As Obama’s 2010 quote above demonstrates, the president chose to emphasize the administration’s role in crafting the loan effort when he spoke about Solyndra, only to shift course once Solyndra failed.

We challenged an administration official to find an example of the administration citing the earlier Bush role before Solyndra went belly-up. We received a news release issued by Vice President Biden’s office dated Sept. 4, 2009, which noted that “Solyndra is the first recipient of a loan guarantee under the Recovery Act and Title XVII of the Energy Policy Act of 2005.”

However, the news release also quoted Biden as saying: “This announcement today is part of the unprecedented investment this Administration is making in renewable energy and exactly what the Recovery Act is all about.” So, again, in Biden’s own words, the stimulus law was promoted — not the Bush-era law.

So, depending on how you frame it, both Obama statements could be true. He touted the administration’s pivotal role when it looked like Solyndra was going gangbusters and then began noting the overall loan program started under Bush when things started going badly. The question is whether his new language is misleading.

The Pinocchio Test

The administration is straining too hard to reverse that aphorism — ie, saying the failure of Solyndra has a thousand fathers. While the original law may have set up the loan guarantee program, Solyndra received its loan through an expansion of that program that the administration was quick to take credit for. (The Biden news release mitigates this a bit, but the reference to the 2005 law was not attributed to Biden.)

We find it hard to believe that any reasonable person could interpret Obama’s remarks this week as anything but a distinct effort to put the blame for Solyndra in some one else’s pocket. The president should accept responsibility, not shirk it.

Two Pinocchios





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    About the Blogger

    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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