CBO Director on Loan Guarantees for New Nuclear Plants

The Congressional Budget Office’s Director, Douglas Elmendorf, provided some important insight into how loan guarantees are assessed in the US government’s budget. For those who have been following the 50 percent default rate argument that nuclear critics have been making, CBO makes clear that the assumption of the rate in their 2003 report was for a piece of legislation that was never enacted.

In the Director’s blog post, CBO basically says that there are numerous varying assumptions that go into assessing the credit risk of each project. But “without such information, much of which would be proprietary, CBO has no basis for estimating the cost to the government of any specific loan guarantee of this type.”

As said before and confirmed by CBO, no data exists to support the claim that 50 percent of new nuclear plants that are built will default. Perhaps the Director’s blog post puts this mis-understood claim to rest; somehow I don’t think so though…