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House approves $6 billion 'cash for caulkers'

By Hibah Yousuf, staff reporter

NEW YORK (CNNMoney.com) -- House lawmakers on Thursday approved a $6 billion measure that aims to provide rebates to homeowners who invest in energy efficiency improvements -- but not without a fight from Republicans.

The bill, officially known as the Home Star Energy Retrofit Act but better known as "cash for caulkers," has been touted by President Obama since December as one of the signature pieces of his administration's larger job-creation strategy.

The act "is a common-sense bill that will create jobs, save consumers money, and strengthen our economy," President Obama said after the House passed the measure. "We have workers eager to do new installations and renovations, and factories ready to produce new energy-efficient building supplies."

House Speaker Nancy Pelosi, D-Calif., estimates that the legislation will create nearly 168,000 jobs in construction, manufacturing, and retail.

The House vote of 246-161 went through with support from the Democrats and overwhelming rejection from the Republicans. The vote simply authorizes the creation of the program; it does not appropriate the funds needed to run it.

The Senate is expected to take up the legislation this summer and determine how to pay for the program, which is likely to be controversial.

How will homeowners cash in?

The bill would fund rebates of as much as 50%, up to $3,000, for energy-saving efforts such as insulation improvements and the replacement of windows, doors, heating and cooling systems. The installations will have to be completed by qualified contractors.

Homeowners that choose to make improvements on their own will receive rebates of up to 50%, to a maximum of $250, on air sealing and insulation products.

The bill also includes reimbursements for those who conduct comprehensive energy audits and reduce their home's total consumption. Homeowners who trim their energy usage by at least 20% can receive up to $8,000 in rebates.

Pelosi said that the bill will cut energy bills by up to $500 a year for some 3 million families.

The bill will also distribute $600 million to states for grants to help mobile homeowners replace pre-1976 models with energy-efficient ones.

Political wrangling

Through a motion to recommit, a political maneuver used by lawmakers to send a bill back to the committee that drafted it, House Republicans added their own conditions to the legislation.

They incorporated language that forbids the program's financing from expanding the federal deficit and bars the bill's funds from being allocated to contractors who have sex offenders as employees.

The Republican stipulations also disqualify from the program homeowners with an annual income of more than $250,000 from the program and require that the rebates be sent directly to homeowners instead of being provided through stores, contractors or other parties.

House Energy and Commerce committee Chairman Henry Waxman, D-Calif., accepted the changes so that the bill can move forward for a vote in the Senate.

Pelosi called the Republican changes a "poison pill" and said House members would "work with the Senate to fix this flawed language."

CNN Congressional Producer Deirdre Walsh contributed to this report.  To top of page

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