Rep. Darrell Issa (R-Calif.), chairman of the Government Reform and Oversight Committee, held the latest in a series of hearings about loan guarantees yesterday, giving the discussion a not-so-subtle official title: “Green Energy Oversight: Examining the Department of Energy’s Bad Bet on Fisker Automotive.”
It went downhill from there.
GOP lawmakers lashed out on Wednesday against the Obama administration for approving Department of Energy-backed loans to the luxury electric car manufacturer Fisker Automotive, reviving a partisan fight over the president’s investments in clean-energy technology.
Earlier this week, the troubled automaker missed a $10 million loan payment, and the Energy Department announced that it had recouped approximately $21 million from a Fisker reserve account that it is applying toward the loan.
Overall, Fisker – which is now on the precipice of bankruptcy – had received $192 million of $529 million in loan money before it was suspended, and taxpayers are now at risk of losing $171 million from two loans awarded to the company.
By any measure, things have not gone well for Fisker and the company, as Brad Plumer explained yesterday is “in serious trouble,” failing to even build any vehicles since last summer. Not surprisingly, the Department of Energy halted all loans to the company nearly two years ago, and has seized about $21 million from Fisker’s accounts.
But for Republicans and other Obama administration critics, the problem is that the troubled company received federal loan guarantees in the first place.
As an aside, my favorite moment yesterday was when Issa, apropos of nothing, said Mitt Romney “would not have made that mistake” of investing in Fisker, which was hilarious, given the failed and misguided loan guarantees Romney made as governor.
Regardless, if Issa and his GOP colleagues really want to have this conversation, they should at least be prepared to acknowledge some basic facts that were in short supply yesterday.
First, Fisker originally requested the federal funds it received in 2008, before President Obama took office. Why? Because the Bush/Cheney administration urged the company to participate in the federal loan program, seeing it as a worthwhile investment. If Republicans are convinced Fisker should never have received aid in the first place, they’re lashing out at the wrong president.
Second, to condemn the federal loan program because one company struggled after receiving assistance is silly – some of the companies in the Department of Energy’s program fared well, some didn’t. It happens. As Michael Grunwald explained a while back, “That’s capitalism. That’s lending. That’s life. As one Obama aide told me: Some students who get Pell grants are going to end up drunks on the street.” It’s not as if those failures discredit the entire Pell grant program
And third, Issa may want to get off his high horse – in 2009, he urged the Department of Energy to extend federal support to an electronic car manufacturer named Aptera, which declared bankruptcy soon after.
Some of the Republicans on the committee yesterday said federal funds shouldn’t go to subsidize car companies that cater to the rich, and the point is not without merit. Whatever one thinks of Fisker or its struggling fortunes, it sold high-priced cars to movie stars and popular entertainers before it ran into a series of business troubles.
But the fact remains that the U.S. had – and arguably still has – a burgeoning electric-car manufacturing sector and two administrations of different parties saw value in helping get that sector off the ground. Sure, Fisker was selling to folks like Leonard DiCaprio, but in time, as the industry grew and prices fell to earth, one could imagine this and other companies competing in the consumer market, manufacturing environmentally-friendly cars.
In the case of this one company, it didn’t work out well, but others have fared far better. There’s no reason for Republicans to throw a fit.