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Gaming Guru

Steve Tetreault

Cash for Caulkers bill has casino restrictions

7 May 2010

WASHINGTON, D.C. -- A $5.7 billion bill that passed the House on Thursday offers homeowners rebates for making their homes energy efficient, but it also came with a troublesome restriction for the casino industry.

In a last-minute change, the bill was amended to say that no money from the so-called Cash for Caulkers rebate program can be spent on travel to "gambling or gaming establishments."

It was not immediately clear what the practical effect might be. House members from gaming-legal states and industry lobbyists said they were caught by surprise by a motion offered by Republican leaders that added strictures to the bill.

No matter, the language was taken by gaming advocates as the latest federal policy shot across the bow of legalized gambling.

In recent years, casinos have taken it on the chin from sources as varied as Sen. Tom Coburn, R-Okla., who last year proposed the industry be denied economic stimulus funding, to President Barack Obama, who twice made wisecracks about Las Vegas that teed off city and state leaders.

Also, the Bush administration and later the Obama administration discouraged bureaucrats from holding gatherings in Las Vegas and other "leisure destinations," a policy that triggered a complaint to the White House last summer by Sen. Harry Reid, D-Nev.

"I am tired of the gaming industry being used as a whipping boy and that is what is happening again," said Rep. Shelley Berkley, D-Nev.

Rep. Dean Heller, R-Nev., said the latest move would prevent money from the new program from being spent on educational conferences and meetings in Las Vegas and Reno.

"This legislation literally carved out Nevada from federal spending," Heller said. "I disagreed with my leadership on this, and I told them so."

Heller said he argued "toe to toe" with Minority Leader John Boehner, R-Ohio, and Republican Whip Eric Cantor of Virginia, on the House floor, but "it was too late" to get the provision removed.

Berkley said House Speaker Nancy Pelosi, D-Calif., promised her the gaming provision would be killed in conference committee. Reid, the Senate majority leader, also said the language would not become law.

The Home Star Energy Retrofit Act passed 246-161. It would authorize $5.7 billion over two years for a program that supporters, mostly Democrats, said would have the added benefits of invigorating the slumping construction industry and making the Earth a little cleaner.

Republicans overwhelmingly opposed the bill, and they were able to attach a condition that it would be terminated if Democrats do not come up with a way to pay for it.

The measure has come to be dubbed Cash for Caulkers, a takeoff on the popular 2009 Cash for Clunkers initiative that rewarded people for replacing gasoline-guzzling vehicles with more fuel-efficient models.

The initiative is separate from an energy tax credit of up to $1,500 that was included in last year's economic stimulus act. That credit for energy efficiency improvements runs through the end of this year.

Supporters estimate that 3 million households would make use of the new program, saving $9.2 billion in energy costs over a 10-year period. They said it would create 168,000 jobs, mainly in the recession-hit construction industry.

Republicans were more skeptical, saying the price tag was too high at a time of mounting federal debts.

Republicans also were able to alter the legislation so that the rebates would go directly to homeowners. In the original version, homeowners were to receive a discount or rebate from a retailer or contractor, who then would apply for payment from the government.

As for the casino provision, a Republican leadership aide said it stemmed from GOP concerns about spending abuse.

The source pointed to a recent California audit of stimulus funding that found a half million dollars in questionable spending, including $8,300 for the board of directors of the Economic Opportunity Council of San Francisco to meet at the Cache Creek Casino in Northern California.

Heller was the only Republican to vote against the added restrictions. Berkley and Titus also voted against it. On final passage, Heller voted against the bill, while Berkley and Titus voted for it.

Titus viewed the overall bill as a construction jobs-builder, "and she will fight to have the (gaming) provision taken out," spokesman Andrew Stoddard said.

Under Home Star, rebates or discounts would be provided to homeowners at the time of sale. The retailer or contractor then would submit documentation to a processing office that would verify the information and forward the request to the Energy Department for payment.

To prevent fraud, the program would require licensing for all participating contractors and a certain percentage of projects would be inspected.

The bill has two parts: The Silver Star program provides upfront rebates of up to $3,000 for specific energy-efficient improvements in homes, such as installing energy-efficient appliances or duct sealing, insulation or new windows or doors.

A Gold Star program would entitle people to up to $8,000 when they conduct comprehensive energy audits and start measures that reduce energy use throughout their homes by more than 20 percent.

The legislation would approve $600 million over two years for grants to states for programs to replace mobile homes with more energy efficient models.

The original bill included $6 billion for the rebate program plus the $600 million for the state grants. The Republicans were able to remove $324 million targeted for a Home Star loan program.