Republican vice presidential nominee Paul Ryan pressed the U.S. Department of Energy in 2008 to write rules for electric-car loans that could have risked almost as much federal money as was lost when Solyndra LLC went bankrupt.
Ryan, a Wisconsin congressman, who has called the department’s lending programs “corporate welfare,” suggested in a letter co-written with three other lawmakers from the state — all Democrats — that money for approved auto loans be released in full up front.
That policy would have later allowed Fisker Automotive Inc., which Ryan on Sept. 4 called an example of President Barack Obama “spending money on favorites,” to draw its entire $529 million loan before it produced any cars. The department, which provided money in installments instead, last year froze all but $193 million of Fisker’s credit after the company fell short of production targets for its first model, the Karma. The letter made no mention of any specific company. Fisker’s loan was approved in April 2010.
The funding request complicates the image that Republican presidential nominee Mitt Romney has tried to project for his running mate as a fiscal watchdog who’s focused on trying to cut the federal budget.
Ryan’s suggestion “makes for reckless decisions, and taxpayers always lose when you circumvent normal process,” said Autumn Hanna, senior program director at Taxpayers for Common Sense, a watchdog group. “It does seem like something that doesn’t go along with how Paul Ryan has aligned himself with federal spending in general and issues at DOE.”
Brendan Buck, a Ryan spokesman, said the letter isn’t in conflict with Ryan’s budgetary philosophy and that what he proposed was a better option than the federal Troubled Asset Relief Program, or TARP, a bailout mechanism created in 2008.
“Nothing in the letter suggests reduced or revised threshold for qualifying funds,” Buck said in a statement. “The flexibility related solely to funding after a company had been approved as a viable recipient. Congressman Ryan believed redirecting these pre-existing funds to aid the American auto industry was a better solution than what the White House ultimately did — use TARP to pick winners and losers.”
Ryan, 42, chairman of the House Budget Committee, is the architect of Republicans’ fiscal blueprint that would cut emergency disaster aid, Medicare and welfare and end Energy Department loan programs to help reduce U.S. spending by $5.3 trillion below Obama’s proposed budget through 2022.
Ryan, along with Representative Tammy Baldwin and Senators Russ Feingold and Herb Kohl, all Wisconsin Democrats, wrote the Oct. 28, 2008, letter as the Energy Department was establishing rules to implement the Advanced Technology Vehicles Manufacturing loan program, created in a 2007 law signed by Republican President George W. Bush. The lawmakers suggested 11 criteria for then-U.S. Energy Secretary Samuel Bodman to use to determine which companies got loans.
Read the whole story: Bloomberg