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Obama calls for keeping production tax credit to save clean-energy jobs

By Christi Parsons and Kathleen Hennessey, Tribune Washington Bureau –

NEWTON, Iowa — From a wind-power factory in this battleground state, President Barack Obama urged Congress to extend tax credits he said would save jobs in the field of clean-energy production.

Obama said continuing the production tax credit would save 37,000 jobs that would otherwise be at risk, an estimate his aides based on reports from industry officials.

“If Congress doesn’t act, companies like this one will take a hit. Jobs will be lost. That’s not a guess. That’s a fact,” Obama said Thursday as he visited TPI Composites, a wind turbine blade manufacturer based in a town that’s home to a closed Maytag factory. “We can’t let that happen. We can’t walk away from these jobs.”

The production tax credit, created in 1992 and extended nearly continuously since then, gives wind farms a credit of 2.2 cents per kilowatt-hour of energy produced. Industry advocates said it spurred $15.5 billion a year in private investment in the U.S. in the last five years. The credit is scheduled to expire at the end of the year.

Obama also is calling on Congress to extend a 30 percent investment tax credit for manufacturers that invest in equipment to make components for clean-energy projects in the U.S.

Politically, the production tax credit has been considered low-hanging fruit for Obama, among the items on his congressional to-do list, with a strong possibility of passing. Since its inception, the credit has had support from lawmakers in both parties, including environmental advocates on the left and conservatives from rural communities in the West and the Plains. Among those pushing for the extension of the production tax credit this time are the GOP governors of Iowa and Kansas.

“The overwhelming majority of wind farms are actually located in the windy red states, if you will,” said Peter Kelley, a spokesman for the American Wind Energy Association, an industry group.

Still, some conservative Republicans have found new traction in their push to flatten the tax code — eliminating all tax credits, subsidies and deductions aimed at boosting specific industries.

And as Congress considers tackling tax reform later this year, there is increasing nervousness among the credit’s supporters that it is newly vulnerable.

“We think it’s time for a lot of these provisions to go away,” said James Valvo, policy director at Americans for Prosperity, an influential free-market advocacy group co-founded by oil and gas mogul David Koch.

“The (production tax credit) has been in place for 20 years,” Valvo said. “I think that’s plenty of time to find out if these industries can stand on their own.”

Such opposition has given Obama an action item on job creation to take up with swing voters focused on the still-flagging economy.

Initial applications for unemployment benefits reached a five-month high in April, but have since fallen somewhat, including a 2,000-drop last week to 370,000 claims. But a heavy slide in orders for long-lasting goods — down 1.9 percent in April after a 2.2 percent tumble in March — was less encouraging.

The president portrayed extending the energy tax credit as a one of the steps “we must take right now” to speed up the recovery. “Too many of my Republican friends in Congress are standing in the way,” he said.

The campaign of former Massachusetts Gov. Mitt Romney, Obama’s likely GOP rival for the White House, reminded Iowans that Obama four years ago promised voters that his energy policy would create 5 million new jobs.

“After 3 ½ years in office, nearly 23 million Americans are still struggling for work,” said Ryan William, a Romney campaign spokesman.

Romney’s campaign did not say whether he would support extending the tax credits. But his economic plan, called Believe in America, mocked Obama’s investment in renewable energy, calling solar and wind “two of the most ballyhooed” forms of alternative fuel.

“Indeed, at current prices, these technologies make little sense for the consuming public but great sense only for the companies reaping profits from taxpayer subsidies,” the plan said.

The Romney campaign began running a TV ad Thursday about his presidential to-do list, saying he would start with ending big government, standing up to China and “repealing job-killing legislation.”

Meanwhile, the administration claimed credit for a doubling of renewable-energy generation during the period since Obama took office. Wind generation has grown 27 percent in the last year, administration officials said.

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