Daniel Kish is senior vice president at the Institute for Energy Research.
Heavily subsidized solar manufacturing company Solyndra imploded last September after wasting hundreds of millions of dollars of taxpayer dollars, and more companies that received money from the same $16 billion government program have followed suit. Now Congress is trying to fix the mistakes it made by creating the loan guarantee program in the first place with the No More Solyndras Act, which was approved by a House Committee on Energy and Commerce subpanel on Wednesday.
Though the bill did not receive unanimous support, any member of Congress who opposes profligate spending and the waste of taxpayer dollars should have supported it in committee. Ideally, members of Congress would reject this program as an illegitimate function of government that is inconsistent with the limits on federal power intended by the authors of our Constitution. Our Founders never intended the government to pick winners and losers or direct industrial policy by political means, and the lesson from this debacle is that there was a reason those limits on federal power were included in the Constitution.
The bill is simple—no new loan guarantees will be issued under the same mismanaged program that awarded money to Solyndra and other failed ventures such as Abound Solar, Ener1, and Beacon Power. All of these companies received taxpayer dollars under the loan guarantee program and all went bankrupt because they chose to trust the political process instead of the wisdom of the people as expressed by market forces.
Because the Department of Energy has already made legal commitments to disburse more money to companies, the bill would also require the agency to report back to Congress on any decisions regarding pending and existing loans. This provision ensures that the Department of Energy will be more transparent and cautious with the remainder of taxpayer dollars it has committed to these projects, and places the responsibility for oversight back with Congress. It also ensures that companies with political connections can't convince the government to subordinate the claims of taxpayers to other creditors, as was the case with Solyndra.
With the No More Solyndras Act, Congress has a simple choice—embrace the waste of taxpayer dollars and vast expansion of government that has typified the program so far, or demonstrate true commitment to fiscal prudence and limited government. The spectacular failure of so many loan guarantee recipients in just a few years' time has illustrated that government has neither the knowledge nor the expertise to pick winners and losers in the market. Instead, many of these loan guarantees went to companies with strong political connections, and it is precisely this type of cronyism that has left the American public so disaffected and angry with leaders in Washington.
This program should serve as a lesson to government officials that those Founders who wrote a document designed to stop these excesses from happening were blessed with the universal knowledge that government has no business controlling everything. This act begins to rein in the "fatal conceit" of those who think themselves smarter than free citizens making free decisions in free markets. Congress passing the No More Solyndra's Act is a good start, but there is a long, long way to go if the United States is going to keep the lights on in the "shining city on the hill."
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