I think my representitive, Steny Hoyer, is really pushing to have everything in tax policy balance because he is very worried about all the defict spending we are doing. The popularity of the tax credit extentions makes them a place where his push to at least stabilize the deficit spending can get some attention. It is worth noting that originally the savings were taken in energy by reducing oil company subsidies but have now been shifted to closing some loop holes in corporate taxes that the corporations say need closing.

The republicans claim that the need to pay for tax policy shouldn't be applied to something that continues a tax credit that has been on going. This is a little silly because the whole point of putting a time limit on such credits is to evaluate periodically if they are still needed. When the sector in booming, it is going to pay for all its early credits is abundance. So, the credits are an investment which should pay off big time. We know that the credits will end and at that time they will be used as an offset in the opposite direction. In fact, renewable energy generation will undoubtably be taxed in the future because it is going to be so cheap that it won't hurt the economy to milk it a little. We want to get to that point sooner which is why we have credits now.

Perhaps the solution is to take a page from the republican playbook and recast all of this as an insurance program. All energy companies would pay a premium to ensure future energy supplies and renewables would get payments based on the fact that they will be there in the future. Once the whole system is renewable, the premiums and the payments all fall on renewables so there is not a lot of reason to retain the system. None of it is done on the tax books, just like the insurance idea for the financial bailout. This would pretty much automatically reduce the "subsidy" for renewables at the point when it is no longer needed. This is pretty much the way we fund the future availability of bank deposits through FDIC insurance so it might have some appeal. Perhaps renewables are too important to be left to tax policy?

Chris