(Editor’s note: The Trump administration delivered its proposed fiscal 2018 budget to Congress, unveiling cuts in hundreds of programs and elimination of others. This story focuses on the energy budget. For an overview of the USDA budget, look for tomorrow’s Agri-Pulse newsletter.)
WASHINGTON, May 23, 2017 - The Trump administration delivered its proposed fiscal 2018 budget to Congress Tuesday, outlining $28 billion in spending, a 6 percent drop from its 2017 spending plan. As expected, many members of Congress and other defenders of current federal programs targeted for major cuts reacted with outrage.
One focus of outrage was key Department of Energy programs slated for either sharp cuts or total elimination. According to Office of Management and Budget Director Mick Mulvaney, such drastic actions are justified because they are essential to having states and the private sector play greater roles in the U.S. economy as the federal government’s role shrinks. His view is that the result will be quickly boosting the U.S. economy from the otherwise expected 1.9 growth rate percent to a steady 3 percent for 2018 and the next decade.
Introducing the administration’s New Foundation For American Greatness budget Tuesday, Mulvaney said “there is good news, because Donald Trump is president and we are going to get 3 percent growth.” He said that would be “just getting back to normal,” after years of the Obama administration’s pessimistic acceptance of 1.9 percent growth.
House Energy and Commerce Committee Chairman Greg Walden, R-Ore., was among the first to welcome the new budget and its new growth target. “This budget proposal demonstrates President Trump’s commitment to balancing the budget and responsibly prioritizing taxpayer dollars,” Walden said. “The initiatives modernizing our energy infrastructure and promoting our nation’s energy abundance would undoubtedly make positive impacts on our constituents’ lives. The president’s proposals show the difficult choices facing the country as we work to reduce the deficit, protect our security, and grow jobs.”
Calling the Trump budget “more of a vision than anything else,” Senate Energy Committee Chair Lisa Murkowski, R-Alaska, was guarded in her reaction. On the one hand, she said “I agree with the President’s emphasis in this budget on economic growth, a strong national defense, developing our natural resources, and balancing the budget.” But she went on to add that “there are elements of this budget I strongly disagree with, especially the drastic cuts to programs intended to help the most vulnerable among us.”
Energy Secretary Rick Perry said the spending plan “delivers on the promise to reprioritize spending in order to carry out DOE’s core functions efficiently and effectively while also being fiscally responsible and respectful to the American taxpayer.”
Despite sharp cuts proposed for key energy sector initiatives that have broad bipartisan support in Congress, Perry said the budget “reflects the importance of strengthening our nuclear capabilities, and places an emphasis on early-stage energy technology research and development. As we refocus resources, we will continue to utilize our national laboratories for cutting edge science in order to improve both our energy and national security.”
Perry pointed out that the budget provides “$6.4 billion for science and energy research and development programs, with a renewed focus on cutting-edge innovation and early-stage R and D.” The budget includes $703 million for the Office of Nuclear Energy and $280 million for the Office of Fossil Energy “to focus on cutting-edge fossil energy research and development, advance domestic energy production, support innovative clean coal technologies, and strengthen our energy security.”
It also provides $636 million for the Office of Energy Efficiency and Renewable Energy “to support the national labs’ effort to drive energy innovations in renewable energy, next-generation transportation, and energy efficiency.”
Perry did not address controversial DOE cuts that would zero out the high-payback Advanced Research Projects Agency-Energy (ARPA-E) Program to save $316 million and the Innovative Technology Loan Guarantee Program and the Advanced Technology Vehicle Manufacturing Loan Program to save $21 million. The justification is that the private sector “is better positioned to finance disruptive energy technology research and development” and “to finance innovative technologies.”
In related energy programs administered by EPA, the budget proposes to eliminate Energy Star and other climate programs to save $66 million. The explanation: “There is no need for EPA to administer voluntary partnership and certification programs like Energy Star with taxpayer dollars, given the popularity and significant private benefits these programs provide to industry partners and consumers.”
Trump’s plan to eliminate ARPA-E drew immediate fire, including this response from National Sorghum Producers Chairman Don Bloss, who said initiatives like ARPA-E “have breathed new life into sorghum, progressing our understanding of sorghum genetics, and continuation of the department’s work stands to benefit all commodities.”
Sen. Maria Cantwell of Washington, the Energy Committee’s top Democrat, also reacted strongly to the planned DOE cuts. “Numbers in a budget are not just numbers,” she said. “They represent the values that we hold as a country. The Trump budget proposal for the Energy Department falls woefully short of reflecting our values and instead slashes the investments we need to make for our children and grandchildren.”
“America is in a race to become the world’s clean energy superpower, and Donald Trump wants to wave the white flag,” Cantwell said. “His budget proposes a staggering 70 percent cut to renewables and energy efficiency initiatives. This would devastate an emerging sector of our economy by killing thousands of clean-energy jobs all over the country, all in a misguided effort to hold onto the past at the expense of our future.” She added that the Trump budget was “dead on arrival.”
American Council for an Energy-Efficient Economy Executive Director Steven Nadel also criticized the proposed budget. “For all the talk about increasing U.S. jobs, the president’s budget takes a meat cleaver to the largest job creator in the energy sector: energy efficiency. It seeks crippling cuts to federal programs that transform waste into wealth and help support 2.2 million energy efficiency jobs.”
Nadel noted that in addition to Energy Star, the budget also proposes to eliminate funds for home weatherization. “These programs lower energy bills for households, businesses, and the federal government itself, all while creating domestic jobs,” he said.
National Farmers Union President Roger Johnson also called on Congress to reject the Trump budget. “The President is proposing massive cuts to renewable energy research and development programs within the Department of Energy, as well as cuts to the U.S. Environmental Protection Agency (EPA),” he said. “Undercutting the important work being done on renewable energy sources hinders our ability to reach the greenhouse gas emissions reductions necessary to maintain the stability of the food system. And gutting the EPA’s budget keeps the agency from performing essential environmental services and pesticide approvals.”
Pointing to proposals that would “undermine” the federal Power Marketing Administrations and “marginalize USDA’s effective rural development programs,” National Rural Electric Cooperative Association CEO Jim Matheson said. “Rather than shifting funds away from critical programs that have a record of success, the administration should be working with co-ops and other stakeholders to jump-start rural America’s economic engines.”
Solar Energy Industries Association President Abigail Ross Hopper said her group was “disappointed” to see the administration’s proposal “to slash programs that promote American-made clean energy.”
“Clean energy research programs have been priorities of both Republican and Democratic administrations and Congresses and the investments have paid off many times over. . . We look forward to working with Congress as it drafts a budget that supports important clean energy programs that create American jobs, advance innovation and stimulate billions of dollars in private investment.”
Listing energy programs targeted for elimination like Energy Star and the Weatherization Assistance Program, Alliance to Save Energy President Kateri Callahan said “we’ve never seen anything remotely like this, going back to Republican and Democratic administrations since Jimmy Carter.”
She said that cutting DOE’s efficiency programs “would be ceding the global leadership we have painstakingly built over the past 40 years to countries like China that are investing heavily in this area because they understand that it is an enormous economic opportunity, a way to make your economy more productive and competitive. This is not the way to make America great again. It’s the opposite.”
House Energy and Commerce Committee ranking member Frank Pallone, D-N.J., called the Trump budget “a devastating proposal that will take resources and services away from millions of Americans who desperately need them to pay for tax cuts for millionaires.”
“The budget turns its back on energy programs for low-income communities and rural America,” Pallone charges. “It eliminates the Low Income Home Energy Assistance Program (LIHEAP), which provides critical assistance to low-income families to heat and cool their homes.” He said the plan to cancel the popular Energy Star Program was “short-sighted.”
In one of the Trump budget’s apparent contradictions, the budget aims to increase U.S. oil, natural gas and coal production to boost energy independence. Yet the spending plan proposes generating additional federal revenue by selling half of the Strategic Petroleum Reserve (SPR) oil stockpile.
Mulvaney said that with increased U.S. production, the SPR is “no longer necessary” and that it will be downsized “without having a dramatic impact on prices.” But merely proposing to shrink the SPR is already dragging oil prices down and could end up curtailing U.S. production. Similarly, the budget’s proposal to open the Arctic National Wildlife Refuge for oil drilling could add further downward pressure on oil prices and U.S. production.
(This story was upated to add comment from Senate Energy Committee Chair Lisa Murkowski.)