WASHINGTON, DC – Senator Dan Coats (R-Ind.), the Chairman of the Joint Economic Committee, today introduced an amendment to the Energy and Water Appropriations Bill that would end the Obama Administration’s failed Advanced Technology Vehicles Manufacturing (ATVM) loan program. Coats discussed the ATVM loan program during his weekly “Waste of the Week” speech.
The ATVM loan program was created in 2007 to provide very low-interest loans to manufacturers who make vehicles or components of vehicles that use alternative energy. To qualify for this loan, applicants must meet a number of requirements. The product must be both manufactured in America and a new or significant improvement upon what’s currently available in the U.S. marketplace.
“Last month, nearly ten years since the program’s inception, the Government Accountability Office took a look at the program’s finances and found that the Department of Energy is quietly sitting on unspent funds,” said Coats. “The history of this loan program suggests that the best course of action is to give the money back.”
Coats cited past problems with the ATVM loan program, including a 2011 loan the Obama Administration approved to Severstal Steel Company, a Russian-owned company with operations in Michigan.
“Technically, Severstal was manufacturing in the United States, but the Obama Administration certainly walked the line in this case,” said Coats. “The U.S. government was providing American taxpayer dollars to a Russian company owned by one of Russia’s richest oligarchs, Alexei Mordashov. The New York Times has reported that Mr. Mordashov has ties to the Kremlin and Russian President Vladimir Putin. After working with the Department of Energy’s Inspector General, we learned that the type of steel made by this Russian company was identical to the steel already being produced in my home state of Indiana. Fortunately, with the help of the IG, we were able to ensure that the Obama Administration voided this loan. But this example calls into question the integrity of this loan program.”
Coats also pointed out that the ATVM program has a lackluster success rate. To date, two of the five projects receiving funds from the program have gone bankrupt.
“These examples demonstrate what happens when the government tries to pick winners and losers in the free market,” said Coats. “It’s time we put a process in place to end this program.”
The Coats amendment would prohibit the new obligation of any loan credit subsidy after the end of fiscal year 2020 and would prohibit the Department of Energy from reviewing any new loan applications after the bill’s enactment. The Congressional Budget Office scored the amendment as saving $300 million over the next ten years.
To watch this week’s installment of Waste of the Week, click here