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percent of new capital expenditures, and the production tax credit of 2.2 cents per kilowatt hour of production don’t help start-ups unless the credits can be sold to investors for money now. There hasn’t been much of a market for buying tax credits since the recession began. To overcome this problem, section 1603 has allowed start-ups, mostly solar companies, to convert the credit into its cash equivalent since 2009. In the first two years of the program, $9.2 billion was distributed to support more than $31.1 billion in capital investment, including the over nineteen thousand solar projects and over four hundred wind projects. The 1603 credit is also projected to increase new wind energy installations 50 percent for every year it remains in place. Section 1603 plants are springing up all over the country. And as I said, there’s a long waiting list of qualified companies that won’t benefit from it and may not get off the ground unless the credit is extended beyond 2011. It’s not such a high price to pay compared with China’s incentives: free land, free worker training, and a twenty-year tax holiday.

Yet the antigovernment position is to let a proven job-creating tax break die while supporting the continuation of long-standing ones for companies already flush with cash, whether they are creating jobs in America or not. And calling 1603 a spending program, not a tax cut, is a weak attack. If section 1603 is a spending program, so are other business tax credits and deductions. That’s why budget experts call them tax expenditures. If those tax breaks aren’t spending, neither is section 1603. It’s a cash advance on the investment tax credit so that it works for new companies as well as for established ones.

When I was in college, professors called this a distinction without a difference. When I was growing up in Arkansas, we called it straining at a gnat and swallowing a camel. That’s what ideology and powerful vested interests will do to you. The provision has created a lot of good jobs in companies that will create a lot more. We need more jobs. It should be extended.

One of the reasons all Americans should support incentives like section 1603 is that over the next couple of years, several of our oldest, most polluting coal-fired power plants are scheduled to be shut down, and we need the capacity to replace them.

HERE ARE SOME RELATED job-creating ideas.

14. Finish the smart grid, with adequate transmission lines, at least enough to connect the areas where the wind blows hardest and the sun shines brightest to the population centers that use the most power. The stimulus legislation provided $17 billion for this purpose, a good start but not enough to cover all the areas of greatest opportunity for power generation and for job creation. Our grid is divided into 140 largely autonomous areas of varying capacity. This leads to electricity disruptions that cost the economy $100 billion a year. Fixing it entirely would cost twice that but would provide a quick return and allow 300,000 megawatts of wind capacity and 4,000 megawatts of large solar projects already planned to be built, because the electricity they generate could be transmitted to users. If the transmission capacity were there, North Dakota alone could provide 25 percent of our nation’s electricity demand with wind.

This is more important than ever, because the cost of wind energy, if produced by turbines that qualify for the production tax credit, is almost competitive with fossil fuel generation now, and solar power, both from photovoltaic cells and from large solar thermal plants that capture the sun’s energy to turn water into steam that runs power generators, is expected to reach parity over the next five years, because of technological breakthroughs and the investment tax credit. The price of both solar and wind drops meteorically as their volume increases, about 30 percent each time capacity is doubled.

An additional benefit of connecting power generators in sunny, windy rural areas to urban grids is that it will create good jobs in areas that have been