DOGE Is Obliterating American Industry - The American Prospect [View all]

[justaprogressive]

One of the hidden gems of American government is a small division of the Department of Energy called the Loan Programs Office. This is a government bank that hands out loans to companies with business plans that go beyond the technological frontier, with ideas nobody has tried before. Commercial banks will generally not loan to such companies—as a rule, private bankers want something that is already proven to work—so the LPO helps such entrepreneurs get from the drawing board to producing and selling an actual product.

The LPO has funded thousands of successful projects, from renewable-energy installations, to solar and battery factories, to new low-emission industrial processes, to power grid upgrades, to the first new nuclear power plant in decades, to domestic EV companies, and much more in that vein. It has virtually no overhead, with just a few hundred staffers running a fund of more than $400 billion. Almost all of these projects are successfully paying back their loans. For any government—and especially the American one, with its underfunded and sclerotic agencies—this counts as a smashing success.

But not for much longer. The LPO is being gutted by Elon Musk—who got an LPO loan himself just 15 years ago—and his DOGE goons. New loans have been frozen, it seems permanently. Worse, a reported 60 percent of LPO staff has already accepted DOGE buyouts, with more to come. Even existing loans are under threat; the California utility PG&E recently requested a rate hike in part because its $15 billion LPO loan faces “substantial uncertainty.” One battery company has canceled a planned LPO-funded factory in Arizona, while another has canceled its planned LPO-funded factory in Georgia and moved it to China. (America First!)

The LPO did fund one high-profile failure during the Obama administration: the solar company Solyndra, which Republicans successfully spun into a major scandal. But this is simply how business loans work, whether it’s the government or private banks doing it. Any business plan might fail, which is why a company pays interest on its loan in the first place. By 2023, the LPO had made almost ten times in interest payments what it lost on Solyndra.

https://prospect.org/environment/2025-05-05-doge-obliterating-american-industry/