- The Foundry: Conservative Policy News from The Heritage Foundation - http://blog.heritage.org -
How Much "Cash for Caulk" Do We Need?
Posted By Nicolas Loris On September 16, 2010 @ 12:30 pm In Economics | Comments Disabled
Congress is back, but before Members head home again to campaign, they have to first do what they do best: spend other people’s money.
Today, Congress will vote on the Rural Energy Savings Program Act, H.R. 4785 —a bill that would authorize $5 billion over five years for the Department of Energy’s Home Star loan program and the Department of Agriculture’s Rural Star program. The Home Star program, also known as “cash for caulkers,” provides low-interest loans for consumers to make energy efficiency improvements to their homes, while the Rural Star program provides loans to rural utility providers who in turn give loans to  farmers “for the purpose of implementing energy efficiency measures or farm efficiency measures.”
If consumers and farmers want to make cost-saving energy efficiency improvements from their homes, they can do so without federal handouts. Why should all taxpayers, including those who don’t own homes, subsidize renovations for those who do? Further, such programs can have long-term effects on consumption patterns in the U.S. If consumers come to expect a handout from the government, they may hold off on buying a new product. As we saw with cash for clunkers, the effect was more of the timing of when consumers purchased new vehicles, not the volume.
What’s worse, the House passed the Home Star Energy Retrofit Act, H.R. 5019  in May, and they sold as a win for the economy, the planet, and consumers because it would purportedly lower both greenhouse gas emissions and electric bills through less energy usage. The bill has a $6.6 billion price tag. What makes the new bill even more infuriating is that it contains provisions that were stripped from H.R. 5019. Since they couldn’t get those provisions through a first time, why not jam them through a second time.
Even before passage of H.R. 5019, the stimulus bill included $5 billion to weatherize homes. But earlier this year ABC News reported that at the end of 2009, only 9,100 have been weatherized; $522 million of the $5 billion has been spent thus far, which equates to over $57,000 per home.
Motives of cost reduction and increased profits go hand-in-hand with becoming more energy efficient. If a company, homeowner, or farmer can find a way to reduce its energy use, it can lower costs and thus the price to consumers. And it can do so without help from the taxpayer.
Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2010/09/16/how-much-cash-for-caulk-do-we-need/
URLs in this post:
 Image: http://www.foundry.org/wp-content/uploads/money_stacks0902114.jpg
 H.R. 4785: http://www.gop.gov/bill/111/2/hr4785
 H.R. 5019: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h5019ih.txt.pdf
 ABC News reported : http://abcnews.go.com/WN/Politics/stimulus-weatherization-jobs-president-obama-congress-recovery-act/story?id=9780935
Copyright © 2011 The Heritage Foundation. All rights reserved.