Providing Economic Assistance to the Automobile Industry

The American automobile industry is facing a time of unique and extraordinary challenges, with a potentially devastating outcome.  Close to three million jobs are tied to the big three automakers when including 250,000 direct employees, approximately 500,000 jobs with suppliers and several million additional jobs that support both the industry and the suppliers.  

The challenges that the industry is facing include consumers switching away from highly profitable SUVs to more efficient vehicles, the precipitous drop in automobile purchases from approximately 16 million vehicles per year to 12 million per year, the abrupt change in capital markets, and high cost structures related to a variety of agreements in place.

Our purpose is to put America back to work while encouraging innovation that creates sustainable commercial opportunities for all Americans, and strengthens our collective economic well being.   In Germany, as part of the economic recovery plan, the government has provided incentives to consumers to purchase automobiles.  This type of market and consumer driven financial incentives would contribute the fastest towards supporting the industry and encouraging commercial transactions.  

One approach is to provide a direct financial rebate of $1,000 for each American manufactured vehicle purchased that exceeds 30 mpg highway, with an additional incentive of $400 per mpg highway over 30 mpg, to a maximum of $5,000 total combined rebate amount per vehicle.  If this constitutes 4 million vehicles per year, the rebate amounts would add up to approximately $10 billion per year.

Obama's Transformational Clean Energy Plan

Introduction

The importance of clean energy has increased in the Obama administration's plans since the election.  This is due to the central importance of clean energy in the administration's economic revitalization plan.  The central position of clean energy to the economic revitalization of our country is warranted, given the significant economic leverage provided by certain clean energy investments.  This also speaks to the unique role and ability of government, to focus on coalescing forces that would otherwise not be brought to bear.  prioritization / act where others would not act / national security

Obama's Energy Economic Revitalization Plan

There are three energy elements as part of the Obama economic revitalization plan, including a $150 billion investment initiative, a new jobs training program, and incentives to boost the renewable energy sector to create jobs.   A summary of the initiatives follow: 

(1)  Invest In A Clean Energy Economy And Create 5 Million Green Jobs - The Obama administration plans to invest $150 billion over ten years in several clean energy areas, including biofuels, plug-in hybrids, commercial scale renewable energy, low emissions coal plants, and the transition to a new digital electric grid.  

(2)  Create New Job Training Programs for Clean Technologies - Increase federal funding for federal workforce training programs addressing clean energy technologies and skills, including advanced manufacturing and weatherization, to help participants find and retain stable and high-paying green collar jobs. 

(3)  Boost the Renewable Energy Sector and Create New Jobs - The Obama administration s planning on creating new federal programs and expanding existing programs that accelerate the development and deployment of renewable energy to create jobs in the clean energy sector.  Two specific areas identified include creating a federal Renewable Portfolio Standard that will require 25% of American electricity to be derived from from renewable sources by 2025.   The implementation of the federal RPS is expected to generate hundreds of thousands of new jobs.  The other major initiative identified by the Obama administration is the extension of the existing  Production Tax Credit, to eliminate the swings in capital investments in wind and solar from uncertainty by investors in the continuity of the ITC.   

The Obama Energy Plan

The Obama administration has made energy policy a cornerstone of their agenda.  They have developed a comprehensive and detailed approach to enhance America's energy future from a jobs, security and environmental perspective.  It appears that the administration will accelerate the deployment of the plan's initiatives that directly create jobs, sequencing the implementation of the other parts of the plan.  Below is a summary of the plan.  A more detailed synopsis will be provided at a later date.    

• Provide short-term relief to American families facing pain at the pump
  
• Help create five million new jobs by strategically investing $150 billion over the next ten years to catalyze private effots to build a clean energy future
  
• Within 10 years save more oil than we currently import from the Middle East and Venezuela
  
• Put 1 million Plug-In Hybrid cars – cars that can get up to 150 miles per gallon – on the road by 2015, cars that we will work to make sure are built here in America
  
• Ensure that 10 percent of our electricity comes from renewable sources by 2012, and 25 percent by 2025
  
• Implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80 percent by 2050