Bush encourages spending on energy-saving products

MILWAUKEE — President Bush visited one of the nation's leading producers of energy-efficient technologies Monday and hailed the company's innovations as proof that the United States can one day wean itself off foreign oil.

Speaking at Johnson Controls, a Fortune 500 company that produces batteries for hybrid vehicles and energy-saving devices for buildings, Bush said, "In order to seize the moment, this country needs to remain technologically advanced."

Reiterating his belief that the nation is "addicted to foreign oil," the president renewed his call for increased spending on science research, development and education and greater government incentives for the makers and users of alternative sources of energy.

"I think we're in an important moment in history," Bush said. "We have a chance to transform the way we power our economy and the way we lead our lives."

Democrats and some Republicans criticize the Bush energy plan as failing to sufficiently address a leading cause of U.S. dependence on imported oil: the fuel efficiency of cars, trucks and sport-utility vehicles. Under pressure from struggling U.S. automakers, which are losing ground to foreign competitors and shedding thousands of jobs, Bush has not proposed large increases in the gasoline mileage that U.S. automakers are required to achieve. Bush has supported slight increases for some light trucks and SUVs but stopped short of across-the-board changes advocated by many lawmakers and environmentalists that could significantly reduce oil consumption.

In his State of the Union speech, Bush called for efforts to "replace more than 75 percent of our oil imports from the Middle East by 2025." Short of imposing bans or outright embargoes, Bush's goal will be difficult, if not impossible, to meet because there is little the government can do to prevent companies from buying oil from any nation they choose, energy experts say.

What government can control is the incentives it offers, through tax breaks and direct investment, to companies to produce new energy sources and energy-efficient products and to consumers who use them.

The president said the most promising breakthrough is the hybrid vehicle, 200,000 of which were sold in the United States last year.

Johnson Control is working on the next generation of hybrids that can be plugged in at home to recharge a new line of batteries that will further decrease gasoline use and pollution. The company's lithium-ion batteries are designed to provide two or three times as much power as today's nickel-metal-hydride batteries, and the potential to reduce battery weight by 50 percent, according to Johnson Controls.

Rep. Ed Markey, D-Mass., questioned Bush's energy policies Monday, saying the administration also supports subsidies for luxury SUVs.

The tax break in question is available to small-business owners who buy a Hummer, Ford Excursion or other SUV weighing more than 3 tons. They can deduct up to $25,000 — depending on their tax bracket — if they use the vehicle exclusively for work.

The benefits don't stop there. Once they subtract the $25,000 from the cost of their 3-ton SUV, small-business owners can deduct the depreciation on the remaining amount. Someone who bought a $60,000 SUV, for example, can claim the remaining $35,000 over six years.

No such luck for small-business owners who buy cars weighing less than 3 tons. No matter how much the vehicles cost, they can claim just $15,535 in depreciation over six years and $1,675 each additional year.

Federal tax rules that took effect last month allow a credit of up to $3,150 for anyone buying a hybrid car.

Senate Finance Committee Chairman Charles Grassley, R-Iowa, is working on a bill that would level the playing field between SUVs and hybrids.

"It's inconsistent for the tax code to encourage business people to buy heavy SUVs and not alternative vehicles," said Grassley, whose committee has oversight of tax legislation.