President Obama said last week he wants to trim "spending in the tax code," but he has firmly defended the provision that best fits that odd phrase: a renewable energy "tax credit" doled out in the form of grants from the U.S. Treasury.

The grant program - created by the stimulus bill and extended through 2011 by last year's tax-extender bill - is a corporate welfare boondoggle whose biggest beneficiaries include huge foreign companies.

Section 1603 of the 2009 stimulus bill instructs the Treasury secretary to issue grants to companies that develop renewable energy installations. To date, the Treasury Department has given out $6.9 billion in these grants (which cover 30 percent of all cost), with more than 80 percent of that money going to wind farms.

From a free-market perspective, the objections here are obvious: Government shouldn't be giving away money in an effort to shape the energy industry. But even judging by Obama's professed standards, the renewable energy grant program is very problematic.

First, consider Obama's talk of "tax reform" and curbing "spending in the tax code." The 1603 program has already spent more than twice the $3.4 billion originally budgeted for it. Given the slew of other subsidies for renewable energy (federal loan guarantees, renewable energy standards, local and state handouts, and much more), this program would seem a great place to begin cutting spending. And more fundamentally, turning the Treasury Department into a venture capital fund for wind companies is a pretty clear instance of mission creep.

Also, Section 1603 clashes with Obama's talk of battling special interests and big business. For instance, two of the seven largest grants have gone to Florida Power & Light company, a very politically connected big business. All told, FPL has already received more than $400 million in grants from this program - about 6 percent of the total.

But supposedly this is all in the name of creating "green jobs," which Obama often calls "jobs that cannot be outsourced." On this score, the renewable energy grants fall far short, as revealed by the muckraking of Russ Choma of American University's Investigative Reporting Workshop.

Take the Meadow Lake Wind Farm in Indiana, which received the single largest 1603 grant, $276 million. Meadow Lake is owned and operated by Horizon Wind Energy, a wholly owned subsidiary of EDP Renovaveis, a Portuguese company. Choma reported that the turbines at Meadow Lake are manufactured by Vestas, and thus "likely made in Denmark, where Vestas is from." The turbines sit atop 350-foot towers imported from Vietnam.

So U.S. taxpayers cut a $276 million check to a Portuguese company in order to create jobs in Denmark and Vietnam.

EDP's U.S. lobbyists include 2008 Democratic National Convention superdelegate Tonio Burgos and the K Street firm Capitol Tax Partners, which boasts a platoon of former GOP and Democratic tax writers from the Treasury Department and from Capitol Hill.

EDP and Horizon also own and operate Blackstone Wind Farm in Illinois, which got a $171 million grant through Section 1603.

Many companies got grants for wind projects they had already completed before 2009, when the stimulus bill was written and passed. That means this money was no incentive, it was simply a giveaway.

The 1603 grant program was set to expire at the end of last year, but the wind and solar industry began a fierce lobbying campaign to keep open the spigot of free cash. Lobbying filings show industrial giants like Bechtel and Vestas pushed for the extension.

For this effort, the American Wind Energy Association retained DLA Piper, home of former Senate Majority Leader Tom Daschle - Daschle is not a registered lobbyist, but his former aide Hogan, who has followed him to two K Street lobbying firms, lobbied for the extension on AWEA's behalf.

AWEA also hired the all-star team of Democratic revolving-door lobbyists at the K Street firm Elmendorf Strategies, including former top aides to Democratic floor leaders Harry Reid, Dick Gephardt, Steny Hoyer and Nancy Pelosi.

And the lobbyist at the heart of the green-industrial complex, former Appropriations Committee aide Steve McBee, lobbied for 1603 extension on behalf of Obama favorite Solyndra, as well as for SolarCity.

This lobbying blitz succeeded, and so Vestas, Solyndra, Bechtel, and EDP Renovaveis have access to your money through the end of 2011, at least.

Obama talks about special interests gaming the tax code for profit while the country is deep in debt. If he wants to do something about this problem, these renewable energy "tax credits" are a good place to start.

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