(Bloomberg News) President Barack Obama is fighting for his "green energy" initiatives as Republicans in Congress criticize the programs after solar-panel maker Solyndra LLC collapsed.
While the programs are under scrutiny, the political damage to the president is likely to be less severe as long as no other companies that benefited from the federal program collapse -- including at least five others with ties to Obama donors and advisors, said crisis management specialists.
"It's not going to be Obama's undoing," said Eric Dezenhall, a crisis-management strategist who heads Washington- based Dezenhall Resources Ltd. and served as a White House aide under former President Ronald Reagan. "For 'green jobs' there's some risk. A legitimate question can be raised to say this is not the time to be spending money in initiatives that go nowhere."
Jonathan Silver, the executive director of the program that granted the Solyndra loan guarantee, is stepping down, the Energy Department said yesterday. The loan guarantee was awarded before Silver joined the Energy Department. Silver was criticized by Representative Cliff Stearns, a Florida Republican, for his management of the contract after he arrived.
Jason Grumet, who advised Obama on energy policy during his 2008 campaign and is president of the Bipartisan Policy Center in Washington, said, "It's entirely predictable that some of these loans will fail. What is surprising is that the administration appears to have done little to prepare the Congress and public for this inevitability."
Competing With China
Obama made that case during a White House news conference yesterday, as he defended the decision to grant a $535 million loan guarantee to Solyndra as a risk worth taking to help U.S. companies that are developing new technologies. China, Europe and other countries are also subsidizing cutting edge energy companies, he said.
"If we are going to compete, then we have got to dominate in cutting edge technology and dominate in cutting edge manufacturing," Obama said. "Clean energy is part of that cutting edge package of the future."
The president added that the administration "knew from the start that the loan guarantee program was going to entail some risk, by definition. But overall the portfolio has been successful."
Last month, House Republicans said they wanted to cut $1.5 billion from a loan guarantee program for green automobile technologies to offset increases in spending on natural disaster recovery.