Making America inefficient: the budget’s gory details

Blog | May 24, 2017 - 11:46 am
By Lowell Ungar, Senior Policy Advisor

The Trump administration seeks crippling cuts to programs that accomplish the very goals of the proposed 2018 budget: jobs, economic growth, international competitiveness, and putting taxpayers first.

Federal energy efficiency programs help bring back American manufacturing so it can compete globally, create domestic jobs by fixing market failures such as split incentives and poor information, and transform waste into wealth by putting dollars back into the economy through fuel savings. They help taxpayers pay their bills, and some even directly decrease federal spending while creating jobs. These programs support the largest job creator in the US energy sector – energy efficiency – which accounts for at least 2.2. million jobs.

We appreciate the budgetary goals of creating jobs, generating wealth, and putting the taxpayer first. But cutting energy efficiency programs does the opposite. 

For example, the budget proposal would shutter programs such as ENERGY STAR® and weatherization assistance that help consumers and families save money on their energy bills. It would eliminate programs such as the Industrial Assessment Centers and SmartWay that help small businesses reduce costs and that provide workforce training. It would also end programs such as the State Energy Program and TIGER grants that help state and local governments improve resilience and infrastructure.

Most research programs that have been critical to innovation and American competitiveness would survive, but they would be slashed to a fraction of their current size. You may be surprised that only the office with “information” in its title would emerge almost unscathed.

We detail the proposed cuts to these efficiency programs below. But first, it is important to point out that even if you think only Scrooge would have proposed such cuts, these are only “shadows of things that May be.” Now Congress will start developing appropriations bills, and they won’t blindly follow this budget.

Energy Efficiency and Renewable Energy Office (Department of Energy)

  • Building Technologies Office: 66% cut to $67.5 million. BTO has helped the average household save almost $500 a year in energy costs through better appliances, equipment, and lighting. The budget would slash remarkably successful research programs, such as those on LED lights and on commercial air conditioners, as well as critical programs that help bring the new technologies to market.
  • Advanced Manufacturing Office: 68% cut to $82 million. AMO helps American businesses develop new products and markets that boost their competitiveness. The highly successful Industrial Assessment Centers, which train university students to assist small and medium-sized businesses, would be eliminated.
  • Vehicle Technologies Office: 73% cut to $82 million. VTO develops fuel efficiency technologies and better vehicle batteries. The budget would end the SuperTruck Program, which has helped domestic truck manufacturers and suppliers stay in the vanguard of technology advances globally. Clean Cities, which helps communities provide alternatives to oil use, also would be eliminated.
  • Weatherization Assistance Program: 100% cut. WAP provides thousands of skilled construction jobs via home energy upgrades that help low-income families. States also use a similar amount of funding from the Low Income Home Energy Assistance Program (at the Department of Health and Human Services) for weatherization. LIHEAP also would be eliminated.
  • State Energy Program: 100% cut. SEP supports state work on energy efficiency and on energy emergencies. Technical support for states on building energy codes would also be reduced to a website.
  • Federal Energy Management Program: 63% cut to $10 million. FEMP saves taxpayer dollars by lowering the federal government’s energy bills.

Other Department of Energy

  • Energy Information Administration: 3% cut to $118 million, perhaps the only good news in this blog. EIA provides critical data from energy use surveys and projections of energy use.
  • ARPA-E and Advanced Technology Vehicle loans would be shut down.

Environmental Protection Agency

  • ENERGY STAR: 100% cut. ENERGY STAR has helped consumers save $430 billion in energy bills. Other effective voluntary efficiency programs also would be shut down, including the SmartWay partnership with shippers, Combined Heat and Power Partnerships, and WaterSense.
  • Vehicle Standards and Certification: 25% cut to $76 million. Funds the state-of-the-art National Vehicle and Fuel Emissions Laboratory, which is holding Volkswagen and others accountable for emissions violations.

Department of Transportation

  • New Starts: 43% cut to $1.232 billion. Competitive grants for major new public transit lines reduce congestion and provide more transportation choices. Budget would only fund some existing grant agreements.
  • TIGER Grants: 100% cut. Highly successful competitive grants for innovative transportation projects create local jobs and build improved infrastructure.

Department of Housing and Urban Development

  • Choice Neighborhoods and HOME Investment Partnerships, which both help build efficient homes for low-income families, would be eliminated.

Department of Agriculture

  • Rural Business and Cooperative Service, which provides financing for economic development, including energy efficiency, to rural small businesses, and Rural Energy Savings Program, which helps rural electric cooperatives provide loans to customers for efficiency, would be eliminated (but funding for the Rural Energy for America Program is specified in the farm bill, and would not be affected by the budget). These programs help support rural jobs.

The deeply-divided Congress was already going to have trouble passing the 2018 appropriations bills. This extreme budget proposal certainly won’t help. Yet energy efficiency programs have always been about common goals for both parties: fixing market failures and reducing economic waste. We urge lawmakers to respond to these crippling cuts with the bipartisan support for energy efficiency they have historically shown.

If you have questions, feel free to reach out to me at lungar@aceee.org.