WASHINGTON, March 16, 2017 – When President Trump’s proposed 2018 budget outline – with its 5.6 percent cut in Energy Department spending – landed on congressional and stakeholders’ desks Thursday morning, it might as well have been labeled “Handle with Care.”
That’s because its steep cuts include targeting federal research and eliminating popular, high-payback programs such as the Energy Department’s Advanced Research Projects Agency-Energy (ARPA-E) initiative and its Energy Star program that costs $50 million per year and is credited with generating “annual savings of more than $34 billion to consumers in reduced energy costs.”
Proposing to terminate ARPA-E comes as no surprise. As Agri-Pulse reported last week, the conservative Heritage Foundation called for eliminating the program to save $297 million. As forecast, the Trump administration’s America First Budget Blueprint in many cases follows Heritage’s recommendations virtually line for line.
The White House’s 62-page “skinny” budget justified ending DOE’s ARPA-E, Innovative Technology Loan Guarantee Program, and the Advanced Technology Vehicle Manufacturing Program by insisting that “the private sector is better positioned to finance disruptive energy research and development and to commercialize innovative technologies.”
Energy Secretary Rick Perry called the spending plan – which would cut overall spending by $1.7 billion, to $28 billion – “forward looking” and “mission focused” with the goal of “positioning our nation to become more energy independent by utilizing America’s greatest natural resource, our people.”
House Speaker Paul Ryan, R-Wis., however, responded to the Trump proposal with caution. He said he welcomes the budget plan “which turns the page from the last eight years.” But he added that the next step will be “reviewing this with the Appropriations Committee and our entire conference.”
Senate Energy Chair Lisa Murkowski added more caution, noting that “This budget request is the first step in a long process through which Congress decides which programs to fund and how much funding those programs should receive. The President’s budget expresses his priorities, and we will consider them, but it is the congressional budget and appropriations committees that will establish our priorities and fund them over the coming months.”
The Alaska Republican specifically warned that while she supports Trump’s emphasis on a strong national defense, “I cannot support many of the proposed cuts in this ‘skinny’ budget.” She said that programs like Essential Air Service, Low Income Heating Assistance, and water and wastewater programs “are not the primary drivers of our debt” and there’s a need “to look at the full budget to find the best ways to reduce federal spending.”
With the EPA targeted for a drastic 31 percent cut, Murkowski pointed out that “Over the past several years we have already made significant progress streamlining agencies like the EPA while retaining funding for its core mission and functions, particularly basic infrastructure. I expect that to continue.”
Far from cautious, House Democratic leader Nancy Pelosi warned that “President Trump is not making anyone more secure with a budget that hollows out our economy and endangers working families.” She added that “Throwing billions at defense while ransacking America’s investments in jobs, education, clean energy and lifesaving medical research will leave our nation weakened.”
National Rural Electric Cooperative Association (NRECA) CEO Jim Matheson reacted to the proposed budget diplomatically. This caution may signal that while strongly opposed to proposed cuts, stakeholders may nonetheless temper their criticisms to keep a seat at the table as negotiations get under way with Congress to craft a final budget over the next six months.
NRECA, representing more than 900 not-for-profit, consumer-owned electric cooperatives across 47 states, has worked closely with a broad range of federal energy and environmental programs at the Department of Energy (DOE) and U.S. EPA. At the very least, any cutback in funding for federal research and development programs affecting electricity generation and delivery will have significant impacts on NRECA’s member co-ops serving 42 million electricity consumers.
NRECA CEO Matheson responded to the initial Trump budget by explaining that “This is only the first step in the budget process that will include the input of America’s electric cooperatives.” Acknowledging a White House goal that the business sector broadly supports, Matheson promised that NRECA “will continue to work with the White House and Congress to reduce the burden of federal regulations.” But in a gentle reminder that NRECA is not likely to support the Trump budget’s proposed cuts for federal research, Matheson called instead for “promoting research, investment and valuable ongoing partnerships between electric co-ops and government agencies.”
Matheson pointed out that the Trump proposals are only a first step “As this administration tackles the difficult work of assessing and shaping its priorities for the budget.” He said that as part of the ongoing budget process, NRECA plans on “providing a window into the communities we serve.”
Matheson concluded by pointing out that across federal agencies including the Department of Energy, Department of Agriculture, Environmental Protection Agency, and U.S. Agency for International Development, “Infrastructure investments, energy reliability, and innovative partnerships are important areas of the budget to our members.”
But even maintaining current levels of federal support for NRECA’s priorities could be very difficult if Congress decides to accept Trump’s $1.1 trillion budget proposal.
At the Department of Energy, the 2018 proposal, still in outline rather than final detailed form, seeks to help offset a $54 billion, 9 percent increase in defense spending by cutting the DOE and most other federal agencies. At DOE, cutbacks affecting current clean energy and energy efficiency programs will be proportionately greater because other DOE spending will be cut by $1.4 billion to support “nuclear capabilities.” The switch will boost National Nuclear Security Administration spending 11.3 percent by cutting the other DOE programs by 17.9 percent.
EPA’s programs dealing with energy and climate change are also targeted. The budget’s proposed $5.7 billion, 31 percent cut for EPA would be achieved by ending funding for President Obama’s Clean Power Plan and other climate initiatives as part of eliminating 50 EPA programs and some 3,200 EPA jobs.
But Congress may chart a different course. Sen. Marco Rubio, R-Fla., reacted by commenting that “The administration’s budget isn’t going to be the budget. We do the budget here. The administration makes recommendations, but Congress does budgets.”
Alliance to Save Energy President Kateri Callahan reacted sharply to the proposed DOE budget cuts and elimination of the Energy Star program. She charged that the proposal “walks away from decades of bipartisan support” and said “We oppose these cuts in the strongest possible terms and will do everything we can to fight them in Congress.”