Visiting Penn State, he urged finding innovative ways the U.S. can stay globally competitive.
STATE COLLEGE, Pa. — President Obama urged U.S. students and industry Thursday to “outinnovate the rest of the world” as he proposed a mix of federal incentives designed to improve the energy efficiency of commercial buildings.
The president called for a new tax credit, a grant program, and loan guarantees, among other programs, to encourage businesses to retrofit their buildings to make them use less power, potentially saving $40 billion a year in energy bills.
“Making our buildings more energy efficient is one of the fastest, easiest, and cheapest ways to save money, combat pollution, and create jobs,” Obama said during a speech at Pennsylvania State University’s Rec Center gymnasium.
Penn State is leading a consortium of academic institutions, nonprofits, and companies developing a high-tech energy re search “innovation hub” at the Philadelphia Navy Yard, with $129 million in grant money from the U.S. Energy Department. Their mission: find new technology and techniques to design, renovate, and build energy-saving buildings.
“Now, that may not sound too sexy — energy-efficient buildings,” Obama said, drawing laughter from the crowd of about 1,500, dominated by students. But nonresidential buildings, he said, produce 40 percent of the nation’s carbon emissions that contribute to climate change.
The Penn State appearance was a thematic follow-up to the president’s Jan. 25 State of the Union address, as the “Winning the Future” banner behind him attested. Obama argues that the United States must invest in research, infrastructure, and education now — despite looming budget deficits and national debt — to ensure that the country can compete with international rivals such as China and thrive over the long term.
Since the November “shellacking” that Democrats took in the midterm elections, Obama has traveled to Indiana, North Carolina, Wisconsin, and now Pennsylvania — swing states important to his 2012 reelection campaign. The president carried those states in 2008, but each elected a Republican senator last year.
Revenue-neutral
The White House won’t say how much the energy-saving incentives would cost, but it said that would all be spelled out when the president’s budget proposal is released Feb. 14. Obama said Thursday that the package would be revenue-neutral, and that to pay for it he wanted to eliminate tax breaks for oil companies.
It’s unclear whether congressional Republicans will go along. In general, the GOP leadership has said Obama should encourage domestic production of oil, natural gas, and coal, in addition to investing in “green energy.”
Wearing a charcoal suit and black dotted tie, Obama listened intently as professor Jim Freihaut guided him through a laboratory where tests were being conducted in sustainable wall systems, solar panels, and green-roof systems.
“My fifth-grade science experiment looked just like this,” Obama joked.
After touring the laboratories, the president spoke in Rec Hall, using the occasion to challenge the students in the audience.
“We need you to be just as proud of what you do in the lab as of what your football team does on the field,” Obama said. “We need you to seek breakthroughs and new technologies that we can’t even imagine yet. … We need you to act with a sense of urgency — to study and work and create as if the fate of the country depends on you — because it does.”
Innovation centers
U.S. Rep. Glenn Thompson (R., Pa.), who greeted Obama at the airport, said he thought the energy innovation centers represented “smart government,” producing basic research that can help the private sector thrive. But he questioned whether oil companies were really getting the subsidies Obama claims, noting that the administration cut the tax break that drillers get for depreciation of wells.
“I don’t think anybody is getting a free walk,” Thompson said.
The best way to spur innovation, he said, would be to lower the United States’ relatively high corporate tax rate for all companies while reducing what he called the regulatory burden on businesses.
“If we do that, we don’t have to worry about these tax breaks that have the government pick winners and losers,” Thompson said.
Among the proposals Obama touted Thursday: changing the tax deduction for investments in upgrading the energy efficiency of commercial buildings to a more lucrative tax credit, with the value of the credit based on the amount of energy saved. The administration believes that would result in a tenfold increase in spending on retrofitting of commercial buildings.
Obama also wants to increase Small Business Administration funding for energy upgrades to existing buildings, and to establish a pilot program of federal loan guarantees for fixes to schools and hospitals.
Such prosaic concerns made for a much lower-key event than the last time Obama visited the Penn State campus, in March 2008 as a candidate for the Democratic presidential nomination. Obama spoke then of hope and change to a crowd of 20,000 spread out on the main quad in front of Old Main.
By all accounts, Obama is still popular on campus. Some students camped out overnight to get tickets to Thursday’s speech, which had been rescheduled from Wednesday because of severe weather, and people gathered outside the gym doors before dawn. But it’s a different time. “I’m a little more skeptical than I was two years out of high school, hearing about ‘change’ and ‘hope,’ ” said Kevin Cirilli, a senior from Delaware County who is slated to graduate in December. “The first thing on my mind is a job, like it is for many Americans. I hope this turns out to be more than a campaign stop.” Contact politics writer Thomas Fitzgerald at 215-854-2718 or tfitzgerald@phillynews.com.
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