Loan program not going away
A number of Democratic officials were in an uproar over President Donald Trump’s budget proposal to eliminate a loan program that Lordstown Motors Corp. might use to seek $200 million for its local electric truck facility.
But there’s only a tiny chance — if even that much — that the loan program will be eliminated.
When Trump, a Republican, released his proposed budget earlier this week, it included the elimination of the Advanced Technology Vehicle Manufacturing Loan Program. His administration referred to ATVM and two other Department of Energy loan programs as “costly, wasteful or duplicative.”
Since it was created in 2008 under then-President George W. Bush, a Republican, as a way to help fund fuel-efficient vehicles, only five loans have closed under this program and none since 2011, according to the Office of Management and Budget, or OMB.
OMB added: “Efforts to increase the attractiveness of the program to potential borrowers have not yielded increased loan activity.”
Also, the nonpartisan U.S. Government Accountability Office in 2014 — under President Barack Obama, a Democrat — and in 2019 recommended eliminating the program.
“Unless the Department of Energy (DOE) can demonstrate a demand for new Advanced Technology Vehicles Manufacturing (ATVM) loans and viable applications, Congress may wish to consider rescinding all or part of the remaining $4.3 billion in credit subsidy appropriations,” the Government Accountability Office wrote in 2019.
This is actually the fourth time Trump has tried to cut ATVM in his budget.
Each attempt to eliminate the loan program was stopped by Congress.
There is no reason to believe it won’t happen again.
And let’s not forget a few things:
One, Lordstown Motors hasn’t even applied for the funding.
Two, the company issued a statement reading, in part: “Our business model stands on its own without” the loan.
Three, Lordstown Motors project to build electric trucks at the former Lordstown General Motors assembly plant isn’t exactly finalized. The company is trying to reopen the facility by the end of this year while seeking to raise money to operate. GM loaned $40 million to the company.
Meanwhile, U.S. Rep. Tim Ryan, D-Howland, said: “Instead of using the power of the White House to help Lordstown Motors get up and running, President Trump announced his intention on Monday to kill the very loan program that Lordstown Motors has said is critical to their business. This isn’t a hand-out; this is a loan that will be repaid in full with interest. I will use my position on the House Appropriations Committee to block the Trump administration’s efforts to end this important program, and I will continue fighting to ensure Lordstown Motors has everything they need to do their important work and get northeast Ohioans back to work.”
The Ohio Democratic Party sent an email with the subject line: “Trump budget screws over Lordstown.”
It quoted Chairman David Pepper as saying that the “stunning news is just one more example of how little (Trump) actually cares about the workers he made so many false promises to. Donald Trump needs to get off Twitter, stop golfing every weekend and get to work helping Ohio workers rather than screwing them over at every turn.”
U.S. Sen. Sherrod Brown, a Cleveland Democrat, mentioned the elimination of the loan program among several proposals by Trump that “is yet another betrayal of working people.”
The loan program could be beneficial to Lordstown Motors if the company applies for money and somehow becomes the first company in nearly a decade to receive it.
But Trump’s decision to kill it shouldn’t surprise anyone as he’s done it every year he’s been in office. If anything, it should have been expected.
And as it’s done three previous times, Congress will again reject the president’s recommendation to get rid of the program.