White House Announces $2.3Bln In Tax Credits To Factories

1/8/10，Dow Jones

By Elizabeth Williamson and Siobhan Hughes

WASHINGTON (Dow Jones)--The Obama administration on Friday announced that it would offer $2.3 billion in clean-energy manufacturing tax credits to 183 companies, seeking to renew its emphasis on domestic economic issues after two weeks spent focused on terrorism

The biggest winners were companies tied to the solar industry, including Hemlock Semiconductor Corp. and Wacker Polysilicon North America LLC. Brand-name companies that were big awardees included United Technologies Corp. (UTX), which plans to retool existing plants to produce a more fuel-efficient jet engine.

The announcement begins a renewed administration drive on economic issues and follows a report that the U.S. unemployment rate stayed at 10% in December as the economy lost 85,000 jobs. Unemployment remains one of the Democrats' thorniest challenges as they look ahead to November congressional elections.

The attempted bombing of a U.S.-bound jet on Christmas Day has, for the past two weeks, riveted the administration on a review of flaws in the nation's intelligence apparatus, a summary of which was released Thursday.

Obama has placed heavy emphasis on incentives for Americans to make energy-efficient improvements to their homes, and investments in renewable energy projects as ways to generate "green jobs." But the administration has faced skepticism from important constituencies such as unions, which fear that U.S. policies will create demand for overseas goods. The manufacturing tax credits are designed to counter those fears, to ensure that U.S. manufacturing capacity can meet U.S. demand.

Obama expressed support for a package of clean-energy job initiatives late last year, and in late fall announced $3.4 billion in investments from the $787 billion economic stimulus package for more efficient "smart grid" electricity distribution projects. In mid-December Vice President Joe Biden announced the administration's support for up to $5 billion in additional funding for a stimulus-related clean-energy manufacturing program.

When Congress returns from its holiday recess in a week it is expected to continue work on an overhaul of the nation's healthcare system, a rework of U.S. financial system regulation and a jobs-creation bill, in that order, congressional leadership aides say. The jobs bill likely will include investments and incentives backed by Obama to spur clean-energy manufacturing jobs.

-By Siobhan Hughes, Dow Jones Newswires; 202-862-6654;