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Ryan was once a big backer of federal auto loans

GOP now goes after green-energy program

- The Washington Times - Sunday, September 9, 2012

A green-energy auto loan program that has come under sharp scrutiny lately from Republicans got an early boost back in 2008 from Rep. Paul Ryan, records show.

Writing to Energy Secretary Samuel Bodman, Mr. Ryan, Wisconsin Republican and now nominee for vice president, and three Democratic lawmakers cited the "importance and impact of this federal loan program" in a letter about the Energy Department's multibillion-dollar Advanced Technology Vehicles Manufacturing Loan Program.

The program provides loans to auto companies to develop more fuel-efficient vehicles.

While Mr. Ryan has won praise for pushing to reduce the size of government, his letter to the Energy Department, obtained by The Washington Times, contains mostly suggestions on how to dole out loan money.

The letter, for instance, states that funding preference should be given to "facilities and/or locations that have documented public/private automotive partnerships."

The lawmakers also call for older assembly plants that adopt fuel-efficient production platforms to receive a higher funding preference.

"I'd say he's in favor of it here. He appears gung-ho," said Edward Altman, a finance professor at New York University who has testified before Congress on the auto industry.

Asked whether Mr. Ryan, whose district is home to many auto workers, stood by the 2008 letter to the Energy Department, Brendan Buck, a spokesman for Mr. Ryan, replied in an email: "This was related to the auto industry, not energy loan programs."

One high-profile recipient under the Energy Department's advanced technology loan program has been Fisker Automotive. Awarded $529 million in loan guarantees, the company has received less than half of the money and suspended work at a plant in Delaware this year amid widespread reports that it missed certain milestones under the loan deal.

In Mr. Ryan's letter, also signed by Wisconsin Democrats Rep. Tammy Baldwin, Sen. Herb Kohl and Sen. Russ Feingold, the lawmakers said the Energy Department should consider "disbursement flexibility, ensuring access to the approved lump sum versus incremental access."

While such an approach could get projects moving faster, Mr. Altman said, the incremental approach to disbursing loan proceeds gives the government more control to make sure funds are spent according to plan. One downside to the so-called "lump sum" approach is that loan recipients could spend cash in ways not outlined in the loan deal, potentially jeopardizing the ability of the government to get repaid if they go broke, he said.

Meanwhile, the Energy Department's loan program has fallen out of favor among some Republicans, including Mr. Ryan.

The program was cited in a Feb. 8, 2012, "waste action alert" by the Republican Study Committee, a group of House Republicans that includes Mr. Ryan.

Republicans have said the program, enacted during the George W. Bush administration but funded in 2009 when Democrats controlled the White House and Congress, has let funds sit idle with many loan applicants left waiting or rejected. They also have raised concerns about Fisker sending jobs overseas.

Mr. Ryan's letter in 2008 reflects not just early support for a program that Republicans later soured on, but also his district's close connection to the auto industry.

In 2009, Mr. Ryan joined three Wisconsin Democrats — Mr. Kohl, Mr. Feingold and Rep. Gwen Moore — in a separate letter to Steve Rattner, who was chairman of the Department of Treasury's auto task force.

The lawmakers reached out to Mr. Rattner at a time when a Chrysler LLC plant in Kenosha, Wis., was closing. Kenosha is in Mr. Ryan's congressional district.

"At a time when unemployment is at an all-time high in the U.S., every effort must be made to promote American jobs and Americas' use of tax dollars prudently," the lawmakers told Mr. Rattner in the letter.

"We strongly encourage you to work with Chrysler to use this available funding to retool the Kenosha engine plant."

The Boston Globe reported on the 2009 letter last month, noting that Mr. Ryan had lauded the program to help automakers retool their factories before trying to strip that same program from the government.

Soon after Republican presidential nominee Mitt Romney picked Mr. Ryan as his running mate, media accounts noted that Mr. Ryan voted in favor of an auto bailout bill when most of his Republican colleagues opposed the measure.

After the 2008 vote, Mr. Ryan issued a statement that the "mounting hardships throughout Southern Wisconsin that have been downright gut-wrenching," including the closure of a General Motors Co. plant in his hometown of Janesville.

"I've maintained that any assistance to the domestic auto industry should be drawn from previously approved funds from a U.S. Department of Energy loan package, rather than divert resources from a financial rescue package or rely on additional taxpayer dollars," he said.

In his 2008 letter to Mr. Bodman, who was Energy Secretary under President Bush from 2005 to 2009, Mr. Ryan and the three Democratic lawmakers offered a host of suggested "benchmarks" for the loan program.

Older assembly plants, they wrote, should be given a higher funding preference, "thereby reducing the carbon footprint associated with new production facilities."

In a request that would benefit struggling factories in Wisconsin, the lawmakers pushed for funding preference for facilities that received "official ceased production or closure status" and assembly plants with a large share of a community's economic and labor base.

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