Already dubbed the Cash for Caulkers program, President Barack Obama revealed another consumer incentive program that might put some cash in your pocket and more than 600,000 unemployed into jobs. But will it work?
White House Releases “Cash for Caulkers” Program
When President Obama released his speech – read it in its entirety on CBS News – he did not actually refer to a Cash for Caulkers stimulus stipulation by name. Cash for Caulkers, the White House suggests, is a new program that incentivizes energy efficiency by rewarding consumers who retrofit their existing homes to meet energy saving guidelines.
This incentive program will then lead to the creation of jobs and decrease of pollution. In the same breath, President Obama rallied for Recovery Act initiative expansions to further benefit energy efficiency as well as green energy jobs.
Cash for Caulkers Will Create Jobs … Really?
It is indisputable that an incentive in the field of home retrofits will benefit contractors, insulation manufacturers and big box home improvement stores. This in turn may create jobs in the short run, as consumers rally to partake in this latest stimulus born incentive program. But what will happen in the long run? A closer look at Cash for Clunkers might hold the answer.
Cash for Caulkers in the Wake of Cash for Clunkers
The Cash for Clunkers program provided consumer incentives when trading in cars that were gas hogs for those that merely sipped their fuel. Consumer Reports reported that a total of 690,114 cars were bought with a total rebate expenditure of $2.878 billion. The average gas money savings per consumer per year is an estimated $720.
Citing the Department of Transportation, Cash for Clunkers was instrumental in saving 42,000 automotive industry jobs, which may be sustainable in the long run, although there is no way to truly forecast the long term job savings effects. Edmunds is a bit less optimistic and suggests that taxpayers spent $24,000 per vehicle to fund the sale of 690,114 car sales of which only 125,000 are thought to have occurred because of the Cash for Clunkers program.
Cash for Caulkers by the Numbers of Peter Welch
The sticking point in the White House’s Cash for Caulkers job creation and energy efficiency incentive program is the fact that President Obama is calling on Congress to make it up and make it happen.
That being said, Vermont Democrat Peter Welch apparently already has an idea that suggests a bold $20 billion two-year rebate program. Entitling it the Retrofit for Energy and Environmental Performance (REEP) program, he sent a memo to the White House on 10-29 that promises employment for 600,000 to 850,000 currently unemployed Americans. This work is created by the energy efficient retrofitting of five million homes, which should save homeowners over $3 billion in energy costs.
How Will I Benefit from Cash for Caulkers?
If Peter Welch’s idea gets the votes and the nod, the average consumer may receive a $1,000 incentive for adding insulation and caulking to their homes. Significantly more money – of as yet undisclosed quantities – is available to the homeowner who does a complete home makeover in an effort to enhance energy efficiency.
In an interesting twist, Representative Welch takes Cash for Clunkers to task for being a short term fix, while his REEP is to be a long term job creation vehicle. Oops?