#24 & #25

270 Energy:Eliminate Department of Energy Loans and Loan Guarantees

Savings in Millions of Dollars
  • 2016
  • 2017
  • 2018
  • 2019
  • 2020
  • 2021
  • 2022
  • 2023
  • 2024
  • 2025
  • 2016-2020
  • 2016-2025


Enacting this option would reduce taxpayer exposure, but no specific savings amount is assumed for enacting this proposal.


Technical Notes on Scoring

CBO Baseline

Unless otherwise noted, calculations for savings for each recommendation relies on the most recent Congressional Budget Office baseline, as found in “An Update to the Budget and Economic Outlook: 2014 to 2024,” published August 27, 2014, has been used.

Savings “Totals”

While totals for the five and 10 year savings are provided by section and for the complete set of recommendations, there are two reasons they should not be viewed as representing total savings for The Budget Book.

First, as noted in the introduction, The Heritage Foundation would recommend that the savings realized in the Function 050 Defense section would stay within the Department of Defense to strengthen the nation’s defense capabilities.

Second, the numbers cannot be deemed to represent the realized savings if every single recommendation were adopted because policy changes made in one program can impact spending levels in other programs.  Thus, the numbers in the table do not reflect any potential interactions between the various policy changes affecting spending or savings.


Heritage Recommendation:

Eliminate Department of Energy (DOE) loans and loan guarantees, leaving only funds available to deal with the associated costs of outstanding commitments.


Eliminate DOE loans to keep energy costs low & the market innovative.

The federal government should not be involved with investment decisions that are better left to the private sector. The government’s intervention in the market decreases the incentive to innovate, and increases the incentive to use the political process to lobby for handouts. Federal loans and loan guarantees promote cronyism that rewards political connectedness over market viability. Market-viable technologies should not need financial support from the taxpayer. Whether a company that receives a DOE loan is profitable or not, the program is misguided. Rather than seeking to improve and reform DOE loan and loan-guarantee programs, policymakers should eliminate them.

Eliminate DOE loans to keep energy costs low & the market innovative.

Contributing Expert

Nicolas (Nick) Loris, an economist, focuses on energy, environmental and regulatory issues as the Herbert and Joyce Morgan fellow at The Heritage Foundation.

See publications by Nicolas Loris

Nicolas (Nick) LorisHerbert and Joyce Morgan Fellow

Heritage Experts

Jack Spencer oversees Heritage Foundation research on a wide range of domestic economic issues as director of the Roe Institute for Economic Policy Studies. Those topics include federal spending, taxes, energy and environment, regulation and retirement savings.

See publications by Jack Spencer

Jack SpencerVice President for the Institute for Economic Freedom and Opportunity

Katie Tubb is a Research Associate and Coordinator in the Thomas A. Roe Institute for Economic Policy Studies

See publications by Katie Tubb

Katie TubbResearch Associate and Coordinator

Additional Reading