Geithner Plans Cuts On Defense Spending To Support Green Technology? (FSLR, STP)

Timothy Geithner's testimony before the House Budget Committee was today. Among the topics of discussion were jobs, taxes, and spending. It is your typical Timothy Geithner, a lot of rhetoric followed by a couple of details pertinent to the situation. We went through the pain of sifting through his rhetoric to bring to you what matters.

Highlight of Small Business Jobs and Wages Tax Cut

1. Under our new "Small Business Jobs and Wages Tax Cut," all businesses will be eligible for a $5,000 tax credit for every new employee they hire in 2010. An additional bonus amount will be available to firms that increase their payroll by adding hours or raising wages, with the total credit amount capped at $500,000 per firm.
2. In order to get money out to businesses quickly and thus provide a fast-acting incentive to hire, firms will be able to claim the credit on a quarterly, rather than annual, basis.

Obama's Plan To Spur "Immediate" Job Growth

Obama and Biden will both go on the record with different figures for how many jobs they saved or created. Geithner is working with them closely to create more jobs and we are told that they have a plan. We just hope it is not more of the same as it is prolonging this recession.

Geithner explained, the "President has proposed measures to spur immediate job growth by creating incentives to invest in our environment and energy security. In addition, the Budget includes an extra $5 billion to expand the number of firms eligible to receive a tax credit for investments in U.S. factories that produce clean energy products."

This could be great news for solar companies such as First Solar (Nasdaq: FSLR) and Suntech Power Holdings (Nasdaq: STP) as they could go after the $5 billion being thrown around for solar products. Solar companies have been hit hard as they have been slashed by analysts who think they will struggle to survive without a crutch by the government. By creating artificial demand through incentives, Geithner may be able to save these companies in the short-run, but is this really a long run fix?

(Read More: Solar Price Targets Hammered By Analyst)

Reductions In Military R&D To Help Save Money

Timothy Geithner explains, "With our tight fiscal constraints for discretionary spending, our Budget for the next fiscal year will increase civilian research and development (R&D) by 6.4 percent. Our aim is to help create the conditions for greater economic productivity and the emergence of new growth- and job-creating businesses. And with most of these new investments offset by reductions in military R&D, we will pursue this aim without increasing the size of government or government spending."

As our nation is at war and trying to fight global terror, they are planning on cutting defense spending. Let's work on the logic here. Reputable, solid, high paying defense jobs are going to be replaced with unsustainable "clean" energy jobs. I agree, we need more innovation in clean energy, but let's allow the weaker green companies with inferior products to fail. This is the only way green energy will innovate and get better! So instead of hurting our defensive manufacturing industry, and risk getting left behind by other countries, we should cut green spending and better direct it to the companies who will power the future.