The first three auto loans for developing “advanced technology” that were announced earlier today actually had their origins under the Bush Administration when the economy, auto companies and taxpayers were in much better shape, at least on the paper that mortgage-backed securities were written on.
Section 136 of the Energy Independence and Security Act of 2007, advanced by the Bush Administration, established an incentive program consisting of both grants and direct loans to support the development of advanced technology vehicles and associated components in the United States. The Department of Energy (DOE) is charged with administering the section 136 program, now known as the Advanced Technology Vehicles Manufacturing Loan Program (ATVM).
Under section 136, the ATVM provides loans to automobile and automobile part manufacturers for the cost of re-equipping, expanding, or establishing manufacturing facilities in the United States to produce “advanced technology vehicles” or qualified components, and for associated engineering integration costs.
First appropriated in the fall of 2008, the program will provide about $25 billion in loans to companies making cars and components in U.S. factories that increase fuel economy at least 25% above 2005 fuel economy levels. The technical and financial review process is focused not on choosing a single technology over others, but is aimed at promoting multiple approaches for achieving a fuel efficient economy, in other words – a scattershot approach that allows the doling out of tax dollars over multiple Congressional areas.