The U.S. Postal Service says it lost $5.1 billion last year — and it can thank Congress for not losing more.

USPS said Tuesday it would have lost about $10.6 billion in the fiscal year that ended in September if Congress hadn’t agreed to postpone about $5.5 billion in annual payments to prefund retiree health benefits. Lawmakers haven’t said yet whether the Postal Service will need to make the payment after the current short-term spending measure expires Friday.

Mail volume dropped to about 168 billion pieces delivered, a drop of 3 billion pieces from the previous year. Deliveries of first-class mail, the most popular delivery option, dropped 6 percent.

Total operating revenue reached $65.7 billion, about $2 billion less than the previous year; operating expenses dropped by about $5 billion to $70.6 billion.

Postal officials said Tuesday that they expect operating revenue to drop to about $64 billion this year.

Amid the losses, USPS delivered some good news: Revenue for Priority Mail and Express jumped $530 million last year, or 6 percent. The increases came as more customers used the Internet to purchase and ship products, USPS said. Standard Mail, normally used to deliver solicitations and catalogs, generated $495 million in revenue, a 2.9 percent jump.

Postmaster General Patrick R. Donahoe said Tuesday that USPS remains on course to cut $20 billion in operating expenses by 2015. Much of those cuts depend on Congress passing laws that would permit the end of Saturday mail delivery, the closing of thousands of post offices and mail processing facilities and changes to how USPS pays its workers and retirees.

A Senate committee last week approved a measure that would give USPS about $7 billion to pay for employee buyouts and other debts, allow a renegotiation of postal worker health care benefits and require two years of studies before ending Saturday mail deliveries. A Republican-backed bill in the House awaits a full vote. It would establish a financial control board to overhaul USPS finances — a move that critics fear would result in hundreds of thousands of postal worker layoffs.

“The news cannot get much worse,” said said Art Sackler, coordinator of the Coalition for a 21st Century Postal Service, representing major private-sector mail customers. “If nothing is done to stem these losses, USPS will be forced to shut down within a year. There are 8 million private-sector jobs that rely on the Postal Service, and these jobs will be put at risk unless Congress quickly enacts bold reforms.”

New e-mails released Tuesday prior to Energy Secretary Steven Chu’s testimony before a congressional investigative committee on Solyndra, reveal that the Obama administration urged their failing clean energy poster child to keep firm layoffs quiet until after the 2010 midterm elections.

First reported by the Washington Post, the October 2010 emails reveal that, despite having received an energy loan from administration of $535 million, the solar panel manufacturer’s chief executive had told the Energy Department he intended to announce worker layoffs on October 28. However in an October 30 email, advisers to Solyndra’s primary investor, Argonaut Equity, explain that the Energy Department had strongly urged the company to put off the announcement until November 3. The day after midterm elections where Republicans trounced the administration’s party.

A Solyndra investor adviser wrote on October 30: “They did push very hard for us to hold our announcement of the consolidation to employees and vendors to Nov. 3rd – oddly they didn’t give a reason for that date.”

On Nov. 3, 2010, Solyndra announced it would lay off 40 workers and 150 contractors and shut down its Fab 1 factory. The Post notes that the DOE “agreed to continue giving Solyndra installments of its federal loan despite the company’s failure to meet key terms of the loan, and in February restructured its loan to give investors a chance to recover $75 million in new money they put into the company before taxpayers would be repaid.”

Emails released earlier this month revealed that a major donor to the President had discussed Solyndra with White House officials, directly contradicting repeated assurances by the Obama administration that the donor, George Kaiser, had never spoken with the White House about the company. The emails reveal that Solyndra came up during a meeting at the White House with Kaiser at the same time Solyndra was seeking a second federal loan. The second loan was not approved and AP reports that an investment venture controlled by Kaiser made a private loan that resulted in the firm and other investors moving ahead of taxpayers in line for repayment in case of a default by Solyndra.

Solyndra declared bankruptcy in September and laid off its 1,100 workers, leaving taxpayers on the hook for more than a half-billion dollars.

Leveraged bets as high as 30 to 1 on risky investments with little equity cushion against potential losses is what helped bring down the likes of Lehman Brothers, Bear Stearns, Fannie Mae and Freddie Mac. Think it can’t happen again? It’s about to — with the Federal Housing Administration.

This could put taxpayers on the hook again for tens of billions of dollars – and possibly much more.

The agency’s annual report is set for release Tuesday. If it doesn’t own up to the huge risk it’s taking on, it will be a distressing sign that Washington has not learned from those earlier failures.

When the mortgage market imploded in 2008, FHA shifted from being a backstop for relatively poorer borrowers to the lender of last resort. In 2007, FHA insured the mortgages of just 6 percent of new home purchases. By 2010, it insured 30 percent. Its insurance guarantees tripled from $305 billion in 2007 to more than $1 trillion today. Meanwhile, its capital reserve has fallen perilously low — to less than one-third its required level.

If home prices rise, unemployment drops and defaults decline all in short order, then FHA’s strategy of tripling down on its insurance guarantees will pay off. Unfortunately for taxpayers, my research shows that FHA has seriously underestimated the risk it has taken on since 2008 — by as much as $50 billion. If the housing and labor markets take another turn for the worse, then FHA – and taxpayers – are in even bigger trouble.

Congress shouldn’t wait for the bottom to drop to act. Election years are difficult ones to pass reform — but at the very least, Congress should strengthen FHA’s capital reserves.

More broadly, we need to have a serious conversation about the government’s role in promoting high home ownership, when the costs of achieving it are so high.

FHA’s extraordinary recent growth represents a sharp increase in its insurance of mortgages taken out by borrowers typically making down payments of less than 5 percent of home value. Given so small an equity cushion, and the fact that house prices have fallen consistently since FHA began its rapid expansion, it is no surprise that more than half of FHA’s insurance is on mortgages backed by homes with negative equity.

Negative home equity and unemployment are the two primary triggers of mortgage default — and both will affect FHA’s fortunes for the foreseeable future.

FHA’s position is precarious even if housing and labor markets do not weaken further because it has substantially underestimated the risk of its insurance liabilities. Various weaknesses in its statistical modeling and risk analysis have led it to understate the probability of future defaults and insurance losses.

One example is from the recent stimulus program to provide up to $8,000 in tax credits for first-time homebuyers. We now know this had little lasting impact on the housing market.

To make matters worse, it encouraged people to buy homes with little or no personal equity investment. Essentially, taxpayers provided down-payment assistance. Existing research indicates that defaults will be high among those who did not make the down payment out of their own resources.

It is likely that FHA insured mortgages on one million or more of these purchases in 2009-2010. These costs alone could be more than $10 billion. FHA also underestimates the extent of negative equity in its insurance portfolio; incorrectly evaluates the risk of its mortgages that refinance, and has made other decisions that give false hope about how large future defaults and insurance losses will be.

These factors are not minor, according to my research, but amount to more than $50 billion of future losses beyond what FHA expects. While it’s true that these losses would be spread over several years, a recapitalization is still urgently needed.

Just to meet the minimum capital required by law will require an infusion of between $50 and $100 billion on top of its current reserves of $30 billion. And, if house prices fall further, or unemployment increases, even more money will be needed.

Large losses are to be expected when insuring extremely highly leveraged investments. These investments are risky even in the best of economic environments - and become markedly more so in weak ones.

If we want the federal government to be in that business, the only sensible strategy is to properly reserve for high expected losses – not triple down again on what is now a trillion-dollar taxpayer exposure and hope for the best. Having proper reserves in place also makes clear the true costs of being in this business.

There are social benefits of higher homeownership. But we cannot tell if they outweigh the costs of achieving it if we systematically underestimate them.

Joseph Gyourko is the Martin Bucksbaum professor of real estate, finance and business & public policy at the University of Pennsylvania’s Wharton School. This essay is adapted from a paper he prepared for the American Enterprise Institute.

A company controlled by a longtime political donor gets a no-bid contract to supply an experimental remedy for a threat that may not exist.

Over the last year, the Obama administration has aggressively pushed a $433-million plan to buy an experimental smallpox drug, despite uncertainty over whether it is needed or will work.

Senior officials have taken unusual steps to secure the contract for New York-based Siga Technologies Inc., whose controlling shareholder is billionaire Ronald O. Perelman, one of the world's richest men and a longtime Democratic Party donor.

When Siga complained that contracting specialists at the Department of Health and Human Services were resisting the company's financial demands, senior officials replaced the government's lead negotiator for the deal, interviews and documents show.

When Siga was in danger of losing its grip on the contract a year ago, the officials blocked other firms from competing.

Siga was awarded the final contract in May through a "sole-source" procurement in which it was the only company asked to submit a proposal. The contract calls for Siga to deliver 1.7 million doses of the drug for the nation's biodefense stockpile. The price of approximately $255 per dose is well above what the government's specialists had earlier said was reasonable, according to internal documents and interviews.

Once feared for its grotesque pustules and 30% death rate, smallpox was eradicated worldwide as of 1978 and is known to exist only in the locked freezers of a Russian scientific institute and the U.S. government. There is no credible evidence that any other country or a terrorist group possesses smallpox.

If there were an attack, the government could draw on $1 billion worth of smallpox vaccine it already owns to inoculate the entire U.S. population and quickly treat people exposed to the virus. The vaccine, which costs the government $3 per dose, can reliably prevent death when given within four days of exposure.

Siga's drug, an antiviral pill called ST-246, would be used to treat people who were diagnosed with smallpox too late for the vaccine to help. Yet the new drug cannot be tested for effectiveness in people because of ethical constraints — and no one knows whether animal testing could prove it would work in humans.

The government's pursuit of Siga's product raises the question: Should the U.S. buy an unproven drug for such a nebulous threat?

"We've got a vaccine that I hope we never have to use — how much more do we need?" said Dr. Donald A. "D.A." Henderson, the epidemiologist who led the global eradication of smallpox for the World Health Organization and later helped organize U.S. biodefense efforts under President George W. Bush. "The bottom line is, we've got a limited amount of money."

Dr. Thomas M. Mack, an epidemiologist at USC's Keck School of Medicine, battled smallpox outbreaks in Pakistan and has advised the Food and Drug Administration on the virus. He called the plan to stockpile Siga's drug "a waste of time and a waste of money."

The Obama administration official who has overseen the buying of Siga's drug says she is trying to strengthen the nation's preparedness. Dr. Nicole Lurie, a presidential appointee who heads biodefense planning at Health and Human Services, cited a 2004 finding by the Bush administration that there was a "material threat" smallpox could be used as a biological weapon.

Smallpox is one of 12 pathogens for which such determinations have been made.

"I don't put probabilities around anything in terms of imminent or not," said Lurie, a physician whose experience in public health includes government service and work with the Rand Corp. "Because what I can tell you is, in the two-plus years I've been in this job, it's the unexpected that always happens."

Negotiations over the price of the drug and Siga's profit margin were contentious. In an internal memo in March, Dr. Richard J. Hatchett, chief medical officer for HHS' biodefense preparedness unit, said Siga's projected profit at that point was 180%, which he called "outrageous."

In an email earlier the same day, a department colleague told Hatchett that no government contracting officer "would sign a 3 digit profit percentage."

In April, after Siga's chief executive, Dr. Eric A. Rose, complained in writing about the department's "approach to profit," Lurie assured him that the "most senior procurement official" would be taking over the negotiations.

"I trust this will be satisfactory to you," Lurie wrote Rose in a letter.

In an interview, Lurie said the contract was awarded strictly on merit. She said she had discussed buying a smallpox antiviral for the nation's emergency stockpile with White House officials and with HHS Secretary Kathleen Sebelius, but that the conversations focused on policy, not the manufacturer.

"We discussed the need for the product, and a need for a product to be stockpiled," Lurie said. "And we discussed an impending procurement."

Lurie denied that she had spoken with or written to Rose regarding the contract, saying such contact would have been inappropriate.

But in a subsequent statement, an HHS spokeswoman acknowledged Lurie's letter to Rose, saying it "reflects the critical importance of the potential procurement to national security."

Representatives of Siga, speaking on the condition they not be identified, said the new drug has been effective in animal testing and that the company is being paid a price commensurate with its value.

Neither the HHS spokeswoman nor the Siga representatives would disclose the agreed-upon profit margin or the per-treatment price. Siga has cited terms of the contract in its public financial statements — but without those financial details.

Worst-case scenarios

Worrying about worst-case scenarios is what biodefense planners do. In the case of smallpox, millions of Americans have no immunity because the vaccination of civilians ended in 1972. And there is no way to guarantee that a rogue regime such as North Korea is not holding smallpox.

Nonetheless, no such threat has been verified. The Bush administration suspected Saddam Hussein of possessing smallpox and other biological weapons, but inspectors did not find any after the U.S. invaded Iraq in 2003.

Still, pressure to move quickly and spend more has helped shape U.S. biodefense policy since the Sept. 11, 2001, terrorist attacks and the anthrax mailings that fall.

Investors such as Perelman saw opportunity. In 2003, Perelman, through his holding company MacAndrews & Forbes Holdings Inc., invested heavily in Siga and installed a team of executives to run it.

The move seemed prescient when Bush, in June 2004, signed Project BioShield, a 10-year, $5.6-billion initiative to fund the development and stockpiling of medications to counter bioterrorism.

Two months later, Siga purchased the rights to what became known as ST-246 from a Pennsylvania company, ViroPharma Inc., for $1 million in cash and 1 million shares of Siga's common stock. Over the next three years, the National Institute of Allergy and Infectious Diseases awarded Siga two research grants and a related contract, worth a total of $23.5 million, to develop the new drug.

From the outset, there was only one potential customer: the U.S. government.

For Siga, the stakes were high. ST-246 was its most promising experimental compound.

From 2005 through September, the company has paid three lobbying firms $800,000 to represent its interests in Washington, public records show. Disclosures filed by the lobbyists said they focused on Project BioShield and "issues related to homeland security and HHS," along with "government procurement of vaccines."

Siga representatives told The Times that the company had lobbied only "generally" for biodefense spending, adding: "Neither Siga nor anyone else on Siga's behalf ever lobbied anyone to get this contract."

Perelman and others at Siga's affiliate, MacAndrews & Forbes, have long been major political donors. They gave a total of $607,550 to federal campaigns for the 2008 and 2010 elections, according to records compiled by the Center for Responsive Politics. About 65% of that money went to Democrats. Perelman donated an additional $50,000 to President Obama's inauguration.

A spokeswoman for Perelman said his contributions reflected nothing more than "his right as a citizen to support candidates he believes in."

From December 2007 to January of this year, Rose, Siga's chief executive, served on the U.S. National Biodefense Science Board, which has advised Lurie on how to respond to biological terrorism and other potential health emergencies. (Rose was appointed during the Bush administration.)

In June 2010, Siga further heightened its presence in Washington by naming to its board Andrew Stern, former head of the Service Employees International Union and a frequent visitor to the Obama White House. The union is a wellspring of campaign money and volunteers for Democratic candidates.

On Oct. 13, 2010, Siga announced that the government intended to award it a contract for ST-246 worth as much as $2.8 billion. Within days, Siga's stock price soared. In its year-end financial statement, the company said:

"Our ability to generate near-term revenue is particularly dependent on the success of our smallpox antiviral drug candidate."

But the federal contract required that the winning bidder be a small business, with no more than 500 employees. Chimerix Inc., a North Carolina company that had competed for the contract, protested, saying Siga was too big.

Officials at the Small Business Administration investigated and quickly agreed, finding that Siga's affiliation with MacAndrews & Forbes disqualified it.

The Obama administration could have awarded the contract to Chimerix as the only eligible small-business applicant. Or it could have reopened the competition to companies of any size.

Instead, the administration moved to block all companies — except Siga — from bidding on a second offering of the contract.

In early December, officials completed a required "justification for other than full and open competition," which said an antiviral against smallpox was needed within five years and Siga was the only company able to meet that timetable.

The rationale was questioned by some in HHS, including contracting officer Brian K. Goodger, who in an internal email called it "a stretch."

On Feb. 18, HHS terminated the original contract and requested a proposal from Siga.

Siga and government officials soon began tangling over the price the company would be paid. Because the contract was no longer to be awarded based on competition and because the only customer was the government, officials sought to assess whether the company's proposed price was "fair and reasonable," as required by federal law.

In so doing, officials looked at how much government money had already gone into developing ST-246. Public records show $115 million in federal support, not including the stockpile contract.

After reviewing Siga's costs and the prices of other drugs produced in low volumes compared with commercial products, the HHS negotiators wanted to pay about $170 for each treatment. The company argued for more based on ST-246's potential value to the nation.

"Siga did not derive its price based on any cost information, and, from Siga's viewpoint, such information is not relevant to determination of an appropriate price," the company's chief financial officer, Daniel J. Luckshire, wrote to Lurie's office and others on March 4.

"Siga has created extremely valuable intellectual property, embodied in ST-246, and Siga has priced ST-246 based on the value of that intellectual property," Luckshire added.

After the two sides had conferred and again aired their differences, a senior HHS official, Michael A. Balady, told a colleague in an email April 4 that the negotiations "went extremely badly.… They are intransigent on price."

On April 6, Rose emailed the government's chief negotiator, D. Andre Early, saying the two sides were "at impasse." Rose said "any further negotiation should occur with a more senior official [with] the authority to take into account the important policy issues that surround this procurement."

Two days later, Lurie wrote her conciliatory letter to Rose, pledging to install a new lead negotiator. Her top subordinate, Balady, followed through by naming Goodger to replace Early, who continued to work on the contract but not as lead negotiator.

A financial analyst for RBC Capital Markets reported to investors in May that the agreed-upon price per dose appeared to be $255. He arrived at that estimate by dividing the $433-million contract by the 1.7 million doses to be delivered. Siga told The Times that this would give a rough approximation of the per-treatment price.

On May 13, HHS announced what amounted to the second awarding of the contract, worth between $433 million and $2.8 billion, depending on whether the government exercised options to buy more of the drug in future years. Siga hailed it as a "historic event for the biodefense industry."

FDA skepticism

Throughout the negotiations over price and profit, a separate issue loomed: uncertainty over whether the Food and Drug Administration would approve ST-246 for use in humans.

For more than a year, the enthusiasm of HHS officials for stockpiling the drug has stood in contrast to the skepticism of the FDA. The agency's stance is important because the contract requires Siga to develop its drug "for ultimate approval by the FDA."

In a June 2010 email, Gary Disbrow, a virologist in HHS' biomedical unit, shared with colleagues his assessment of where the FDA stood on the smallpox drugs being developed by Siga and Chimerix, the North Carolina company: "My interpretation of their current position is that there is NO foreseeable path to licensure."

The problem was the inherent limits of animal testing in determining whether the drugs would be safe and effective in fighting smallpox in humans. Researchers are prohibited from infecting humans with the virus.

In May of this year, Robert G. Kosko Jr., a manager in the FDA's antiviral-products division, wrote that there was "no clear regulatory path" for approving antiviral drugs for smallpox — again because of the uncertainty surrounding proof of effectiveness.

The FDA has scheduled a public meeting in December to discuss Siga's and Chimerix's drugs. Siga's contract requires it to conduct additional studies to seek the agency's approval.

Lurie said she hoped the FDA would ultimately approve ST-246. "We would not have gone ahead with a procurement unless we thought there was a pathway," she said.

Short shelf life

Unlike the smallpox vaccine, which remains potent for decades, Siga's drug is guaranteed for only 38 months.

The administration had intended to award Siga the exclusive option to replenish or expand the stockpile, but officials relented after Chimerix formally protested. In June, the government settled the dispute by dropping the exclusivity provision. That limited the value of Siga's contract to $433 million and meant that other companies could compete to fill future orders for the drug.

"Though unhappy about it, Eric [Rose of Siga] would rather remove the options than take the chance of possibly losing the protest and thus the entire contract," Goodger wrote to his superiors on June 11.

HHS officials, however, were concerned about how Siga might react. Goodger reassured his higher-ups that despite its disappointment, the company would not seek "any negative publicity."

New internal White House emails reveal that a scathing critique of Energy Secretary Steven Chu by a former Obama political advisor was widely circulated at the highest levels of the administration.

The Feb. 25, 2011 email that sparked the deliberations landed on West Wing desks just as the solar energy firm Solyndra was starting to show outward signs of financial trouble. It was sent by Dan Carol, a former Obama campaign staffer and clean energy advocate who was described by Obama's then-Chief of Staff Pete Rouse as someone whose views "reflect the President's general philosophy on energy policy."

Carol's four-page proposal to restructure the Energy Department included the blunt recommendation that Chu be fired, and that his leadership team also be replaced, calling it time for "serious changes, even if they are uncomfortable to make."

"I would respectfully suggest that the president be strongly encouraged to make major leadership changes as soon as possible," Carol wrote.

Carol also predicted the political fallout that would result from what he saw as inevitable failures of the Energy Department's now-embattled loan guarantee program. He made the dire predictions when advising that Obama replace Chu with someone who was not "too associated … with [the] Silicon Valley business elite."

"Not because they aren't talented," Carol writes, "but because that appointment will be caught up in the wave of GOP attacks that are surely coming over Solyndra and other inside DOE deals that have gone to Obama donors and have underperformed. No reason to fuel that coming storm, and believe me it will come."

The Carol email and the internal deliberations that it spawned became public late Friday along with 135 pages of other internal documents that the White House sent to Congress. The document dump was the latest attempt by the Obama administration to respond -- on its own terms -- to a subpoena for all materials that reference the Solyndra loan in any way. It also comes less than a week before Chu is scheduled to testify before a House Energy and Commerce investigative subcommittee about the Solyndra loan.

White House officials said the emails received by Congress today further prove that politics never entered into the decision to loan money to Solyndra.

As Carol predicted, Solyndra's spiral into bankruptcy has led to a raging political firestorm, with Republicans openly questioning whether the decision to send half a billion dollars to the California solar panel manufacturer was motivated by politics. A leading investor in the company was also a major Obama political fundraiser, Oklahoma billionaire George Kaiser. As recently as this week, Kaiser has reiterated that he made no effort to influence the loan decision making, and the White House has echoed Kaiser's stance.

The new documents offer only a tiny glimpse into the reaction that Carol's email produced inside the West Wing. Numerous senior administration officials were forwarded copies of the Carol proposal and asked by Rouse to comment and respond. Rouse himself wrote on March 14 that he was "not that interested in Dan's criticism of Sec. Chu," but invites other senior officials to weigh in on "Dan's general assessment of the need for greater focus on our energy policy agenda."

"Dan is a clean energy activist who has a clear point of view and is pushing his particular agenda," Rouse writes. "Nonetheless, he is smart and reflects the President's general philosophy on energy policy."

Carol is described in internet profiles as an "evangelist for new ideas and approaches to galvanize and build the Green New Deal, working with green businesses, foundations, governments and non-profits." He served as the Content & Issues Director for the Obama for President Campaign.

Administration officials said they continue to try to negotiate with Congress over the terms of the House subpoena for documents about the Solyndra loan. Officials said Friday that, in addition to the new emails forwarded to the Hill, the administration has also agreed to share additional documents "in camera," so as to allow members of Congress to see more if its internal deliberations on Solyndra without making the documents available to the public.

The White House release is the latest move in a long-running tug of war with House Republicans over Solyndra documents. White House officials said they have bent over backwards to provide relevant materials -- those that aim to resolve whether politics entered into the discussions of the Solyndra loans. But House Republicans have argued that they are endowed with investigative power, and have every right to determine which documents are relevant after reviewing all of the materials they have requested.

On Thursday, the White House failed to comply with a noon deadline set by Congressional investigators to produce all communications related to Solyndra.

Last week, White House counsel Kathryn Ruemmler said that the vote by the House and Energy Committee's investigative subcommittee to subpoena all White House records on Solyndra, including emails, documents and memos, "was driven more by partisan politics than a legitimate effort to conduct a responsible investigation."

Asked about the deadline by Jake Tapper of ABC News on Thursday, White House press secretary Jay Carney referenced Ruemmler's earlier response. "As the White House counsel made clear," said Carney, "this is something we view as overbroad, unnecessary, and, I think in my words, when something seems partisan, it probably is."

Carney said that the White House had already been "enormously cooperative with legitimate oversight in this area and others," turning over more than 85,000 pages of documents, and would continue to cooperate with investigators.

"When we hear the Speaker of the House saying that the Republicans will be, quote, relentless, in pursuing this oversight investigation," said Carney, "I think most American people wish they would be as relentless in taking measures to help the economy and create jobs."

The Republican leadership of the House Energy and Commerce Committee, which authorized the subpoena on a strict 14-9 party line vote, said "the White House could have avoided the need for subpoena authorizations if they had simply chosen to cooperate."

"That would have been the route we preferred," said Rep. Fred Upton, R.-Mich., chairman of the committee, "and frankly, it would have been better for the White House to get the information out now, rather than continue to drag this out."

Upton said the request for documents was "reasonable." "We are not demanding the President's blackberry messages, as we are respectful of Executive Privilege," said Upton. "What is the West Wing trying to hide? We owe it to American taxpayers to find out."

WASHINGTON — Halfway between Los Angeles and San Francisco, on a former cattle ranch and gypsum mine, NRG Energy is building an engineering marvel: a compound of nearly a million solar panels that will produce enough electricity to power about 100,000 homes.

The project is also a marvel in another, less obvious way: Taxpayers and ratepayers are providing subsidies worth almost as much as the entire $1.6 billion cost of the project. Similar subsidy packages have been given to 15 other solar- and wind-power electric plants since 2009.

The government support — which includes loan guarantees, cash grants and contracts that require electric customers to pay higher rates — largely eliminated the risk to the private investors and almost guaranteed them large profits for years to come. The beneficiaries include financial firms like Goldman Sachs and Morgan Stanley, conglomerates like General Electric, utilities like Exelon and NRG — even Google.

A great deal of attention has been focused on Solyndra, a start-up that received $528 million in federal loans to develop cutting-edge solar technology before it went bankrupt, but nearly 90 percent of the $16 billion in clean-energy loans guaranteed by the federal government since 2009 went to subsidize these lower-risk power plants, which in many cases were backed by big companies with vast resources.

When the Obama administration and Congress expanded the clean-energy incentives in 2009, a gold-rush mentality took over.

As NRG’s chief executive, David W. Crane, put it to Wall Street analysts early this year, the government’s largess was a once-in-a-generation opportunity, and “we intend to do as much of this business as we can get our hands on.” NRG, along with partners, ultimately secured $5.2 billion in federal loan guarantees plus hundreds of millions in other subsidies for four large solar projects.

“I have never seen anything that I have had to do in my 20 years in the power industry that involved less risk than these projects,” he said in a recent interview. “It is just filling the desert with panels.”

From 2007 to 2010, federal subsidies jumped to $14.7 billion from $5.1 billion, according to a recent study.

Most of the surge came from the economic stimulus bill, which was passed in 2009 and financed an Energy Department loan guarantee program and a separate Treasury Department grant program that were promoted as important in creating green jobs.

States like California sweetened the pot by offering their own tax breaks and by approving long-term power-purchase contracts that, while promoting clean energy, will also require ratepayers to pay billions of dollars more for electricity for as long as two decades. The federal loan guarantee program expired on Sept. 30. The Treasury grant program is scheduled to expire at the end of December, although the energy industry is lobbying Congress to extend it. But other subsidies will remain.

The windfall for the industry over the last three years raises questions of whether the Obama administration and state governments went too far in their support of solar and wind power projects, some of which would have been built anyway, according to the companies involved.

Obama administration officials argue that the incentives, which began on a large scale late in the Bush administration but were expanded by the stimulus legislation, make economic and environmental sense. Beyond the short-term increase in construction hiring, they say, the cleaner air and lower carbon emissions will benefit the country for decades.

“Subsidies and government support have been part of many key industries in U.S. history — railroads, oil, gas and coal, aviation,” said Damien LaVera, an Energy Department spokesman.

A Case Study

NRG’s California Valley Solar Ranch project is a case study in the banquet of government subsidies available to the owners of a renewable-energy plant.

The first subsidy is for construction. The plant is expected to cost $1.6 billion to build, with key components made by SunPower at factories in California and Asia. In late September, the Energy Department agreed to guarantee a $1.2 billion construction loan, with the Treasury Department lending the money at an exceptionally low interest rate of about 3.5 percent, compared with the 7 percent that executives said they would otherwise have had to pay.

That support alone is worth about $205 million to NRG over the life of the loan, according to an analysis performed for The New York Times by Booz & Company, a strategic consulting firm that regularly performs such studies for private investors.

When construction is complete, NRG is eligible to receive a $430 million check from the Treasury Department — part of a change made in 2009 that allows clean-energy projects to receive 30 percent of their cost as a cash grant upfront instead of taking other tax breaks gradually over several years.

Californians are also making a big contribution. Under a state law passed to encourage the construction of more solar projects, NRG will not have to pay property taxes to San Luis Obispo County on its solar panels, saving it an estimated $14 million a year.

Assisted by another state law, which mandates that California utilities buy 33 percent of their power from clean-energy sources by 2020, the project’s developers struck lucrative contracts with the local utility, Pacific Gas & Electric, to buy the plant’s power for 25 years.

P.G.& E., and ultimately its electric customers, will pay NRG $150 to $180 a megawatt-hour, according to a person familiar with the project, who asked not to be identified because the price information was confidential. At the time the contract was awarded, that was about 50 percent more than the expected market cost of electricity in California from a newly built gas-powered plant, state officials said.

While neither state regulators nor the companies will divulge all the details, the extra cost to ratepayers amounts to a $462 million subsidy, according to Booz, which calculated the present value of the higher rates over the life of the contracts.

Additional depreciation tax breaks for renewable energy plants could save the company an additional $110 million, according to Christopher Dann, the Booz analyst who examined the project.

The total value of all those subsidies in today’s dollars is about $1.4 billion, leading to an expected rate of return of 25 percent for the project’s equity investors, according to Booz.

Mr. Crane of NRG disputed the Booz estimate, saying that the company’s return on equity was “in the midteens.”

NRG, which initially is investing about $400 million of its own money in the project, expects to get all of its equity back in two to five years, according to a statement it made in August to Wall Street analysts.

By 2015, NRG expects to be earning at least $300 million a year in profits from all of its solar projects combined, making these investments some of the more lucrative pieces in its sprawling portfolio, which includes dozens of power plants fueled by coal, natural gas and oil.

NRG is not the only company gobbling up subsidies. At least 10 of the 16 solar or wind electricity generation projects that secured Energy Department loan guarantees intend to also take the Treasury Department grant, and all but two of the projects have long-term agreements to sell almost all of their power, according to a survey of the companies by The Times.

These projects, in almost all cases, benefit from legislation that has been passed in about 30 states that pushes local utility companies to buy a significant share of their power from renewable sources, like solar or wind power. These mandates often have resulted in contracts with above-market rates for the project developers, and a guarantee of a steady revenue stream.

“It is like building a hotel, where you know in advance you are going to have 100 percent room occupancy for 25 years,” said Kevin Smith, chief executive of SolarReserve. His Nevada solar project has secured a 25-year power-purchase agreement with the state’s largest utility and a $737 million Energy Department loan guarantee and is on track to receive a $200 million Treasury grant.

Because the purchase mandates can drive up electricity rates significantly, some states, including New Jersey and Colorado, are considering softening the requirements on utilities.

Brookfield Asset Management, a giant Canadian investment firm, will receive so many subsidies for a New Hampshire wind farm that they are worth 46 percent to 80 percent of the $229 million price of the project, when measured in today’s dollars, according to analyses for The Times performed by Booz and two other two industry financial experts. (The wide range reflects a disagreement between the experts on the future price of electricity in New Hampshire.)

Richard Legault, the chief executive of Brookfield Renewable Power, the division that oversees the Granite Reliable project in New Hampshire, declined to discuss his profit expectations in detail, but said the project might not have happened without government assistance.

“When everything has come together, it is a good investment for Brookfield, it is no doubt,” Mr. Legault said. “We are quite happy with it.” (Brookfield is also the owner of the small park in Manhattan that is home to the Occupy Wall Street protesters.)

Even companies whose business has little to do with energy or finance, like the Internet giant Google, benefit from the public subsidies. Google has invested in several renewable energy projects, including a giant solar plant in the California desert and a wind farm in Oregon, in part to get federal tax breaks that it can use to offset its profits from Web advertising.

Industry executives and other supporters of the subsidies say that the public money was vital to the projects, in part because financing for renewable energy projects dried up during the recession. They also note that more traditional energy sectors, like oil and natural gas, get heavy subsidies of their own. For example, in the 2010 fiscal year, the oil and gas producers got federal tax breaks of $2.7 billion, according to an analysis by the Energy Information Administration.

“These programs just level the playing field for what oil and gas and nuclear industries have enjoyed for the last 50 years,” said Rhone Resch, president of Solar Energy Industries Association. “Do you have to provide more policy support and funding initially? Absolutely. But the result is more energy security, clean energy and domestic jobs.”

Michael E. Webber, associate director of the Center for International Energy and Environmental Policy at the University of Texas, Austin, said renewable energy subsidies were a worthy investment. “It is a form of corporate welfare that is consistent with other social goals like job creation, clean air and boosting a domestic source of energy,” he said.

Overflowing Breaks

Obama administration officials said the subsidies were intended to help renewable-energy plants that were jumbo-sized or used innovative technology, both potential obstacles to getting private financing. But even proponents of the subsidies say the administration may have gone overboard.

Concerns that the government was being too generous reached all the way to President Obama. In an October 2010 memo prepared for the president, Lawrence H. Summers, then his top economic adviser; Carol M. Browner, then his adviser on energy matters; and Ronald A. Klain, then the vice president’s chief of staff, expressed discomfort with the “double dipping” that was starting to take place. They said investors had little “skin in the game.”

Officials involved in reviewing the loan applications said that Treasury Department officials pressed the Energy Department to respond to these concerns.

Officials at both agencies declined to discuss the anticipated financial returns of the clean-energy projects the federal government has agreed to guarantee, saying the information was confidential.

But Energy Department officials said they had carefully evaluated every project to try to calculate how much money the developers and investors stood to make. “They were rejected, if they looked too rich or too risky,” Mr. LaVera, the Energy Department spokesman said.

In at least one instance — NRG’s Agua Caliente solar project in Yuma County, Ariz. — the Energy Department demanded that the company agree not to apply for a Treasury grant it was legally entitled to receive. The government was concerned the extra subsidy would result in excessive profit, NRG executives confirmed.

In other cases, the agency required that companies use most of the Treasury grants that they would get when construction was complete to pay down part of the government-guaranteed construction loans instead of cashing out the equity investors.

“The private sector really has more skin in the game than the public realizes,” said Andy Katell, a spokesman for GE Energy Financial Services, which like Goldman Sachs, Morgan Stanley and other financial firms has large investments in several of these projects.

But there is no doubt that the deals are lucrative for the companies involved.

G.E., for example, lobbied Congress in 2009 to help expand the subsidy programs, and it now profits from every aspect of the boom in renewable-power plant construction.

It is also an investor in one solar and one wind project that have secured about $2 billion in federal loan guarantees and expects to collect nearly $1 billion in Treasury grants. The company has also won hundreds of millions of dollars in contracts to sell its turbines to wind plants built with public subsidies.

Mr. Katell said G.E. and other companies were simply “playing ball” under the rules set by Congress and the Obama administration to promote the industry. “It is good for the country, and good for our company,” he said.

Satya Kumar, an analyst at Credit Suisse who specializes in renewable energy companies, said there was no question the country would see real benefits from the surge in renewable energy projects.

“But the industry could have done a lot more solar for a lot less price, in terms of subsidy,” he said.

As many as a dozen members of Congress and their aides took part in insider trading based on foreknowledge of market moving information on Capitol Hill, disgraced Washington lobbyist Jack Abramoff told CNBC in an interview.

Abramoff, who was once one of the wealthiest and most powerful lobbyists in Washington before a corruption scandal sent him to federal prison for more than three years, said that many of those members of Congress bragged to him about their stock trading prowess while dining at the exclusive restaurant he owned on Pennsylvania Avenue.

 But Abramoff, whose black trench coat and fedora became one of the most notorious images in recent Washington history after his fall from grace, said he didn't play the stock market himself — he considered it an inherently unfair "casino" in which the house had far more information than the players. Abramoff made most of his fortune representing — and, as it turned out, duping — Native American tribes rich with cash from casino operations.

The former lobbyist said the amounts members of Congress earned trading off their inside knowledge ranged from as little as $2,000 to, as much as "several hundred thousand dollars," that was claimed by one member of Congress.

Abramoff declined to name the members of Congress.

"It was more, 'Look at me, I'm a real great stock trader,'" Abramoff told CNBC of the congressional bragging. "All of a sudden somebody from a background maybe in law, maybe in some other unrelated business area, all of a sudden is picking winners and losers in the market."

 "I was making far more money than they were," Abramoff recalled. "So I wasn't as impressed as perhaps they thought I'd be."

At the time, Abramoff, who was involved in an extensive corruption ring, didn't think much of it. But after years in prison to reflect on the culture of corruption in Washington, Abramoff says he thinks trading based on inside Congressional knowledge is wrong.

"These people should not be using whatever information they gain as public servants to benefit themselves, any more than they should be taking bribes," he said.

Generally, however, legal analysts say that Wall Street insider trading laws do not apply to Congress. As an open and public institution, the legal assumption has long been that any member of the public can have access to information about how Congress works. In practice, though, that's simply not true, as powerful members of Congress come into contact daily with market-moving tidbits. That gap between the law and the reality has made Capitol Hill a virtual free-fire zone for insider trading. Over the years, academic studies have found that members of the House of Representatives beat the market by as much as six percent per year and members of the Senate do even better than that.

And Abramoff says everybody on the inside knew it. "I think it was pretty widely known and it is pretty widely known that it is going on," he said.

Abramoff has been making the rounds, speaking with the media this week, to promote his new book, "Capitol Punishment: The Hard Truth About Washington Corruption From America's Most Notorious Lobbyist," which went on sale Monday.

Abramoff said that the most valuable type of information for Congressional insider trading is held by congressional investigators who pry deeply into corporate goings on. A particularly easy target is advance knowledge of the announcement of an investigative hearing into a company.

"Hearings under almost every circumstance are going to have a bad impact on a company," Abramoff said. "And so some staffers I've seen in the past talking about the fact that, 'Oh, I'm gonna go out and short that company.'"

But the man who spread millions around the nation's capital said he didn't like to invest his own money in the stock market. "I'd never really played the stock market," he said. "I viewed it as a big gamble because of the fact you don't have all the information you need. The casino has all the information, and you don't."

Voters in Ohio have approved a ballot measure intended to keep government from requiring Ohioans to participate in any health care system.

The constitutional amendment passed is largely symbolic, coming in response to the 2009 federal health care overhaul, a provision of which mandates that most Americans purchase health care.

Supporters hope it will prompt a challenge of the overhaul before the U.S. Supreme Court.

The tea party and Republican groups backing the amendment say the Affordable Care Act was an overreach by the Obama administration and Congress.

They hope approval of the ballot issue will bar Ohio from instituting a state-mandated health insurance program like that of Massachusetts.

Opponents argued state law can't trump federal law and that the amendment's wording could unintentionally jeopardize state health programs.

One of Christmas' most recognizable symbols apparently needs a PR campaign -- and a new tax to pay for it. 

The Obama administration has imposed a 15-cent tax on Christmas trees in order to pay for a new board tasked with promoting the Christmas tree industry. 

The new fee and board were announced in the Federal Register on Tuesday, to be effective Wednesday. According to the Agriculture Department announcement, the government will impose a 15-cent charge on "producers and importers" of fresh Christmas trees, provided they sell or import more than 500 trees a year.  

The money is not meant to pay down the debt or fund any other program. The Agriculture Department-imposed tax is designed to go back into the new Christmas Tree Promotion Board.

The board, proposed earlier this year, is actually the culmination of a years-long effort by the fresh Christmas tree industry to promote itself, according to the background provided in the Federal Register. The industry has faced increasing competition from producers of artificial trees, but efforts to collect voluntary contributions for a fresh-tree marketing campaign have repeatedly run out of funding. So the government stepped in to mandate a fee to support the promotion board. 

Heritage Foundation Vice President David Addington, who first reported on the rule on his blog Tuesday evening, said there are two problems with the new fee. First, he said it's likely the 15 percent fee will be passed on to consumers. Second, he said it's inappropriate for the government to be putting its "thumb on the scale," helping out the fresh-tree sellers and not the artificial-tree sellers. 

"If it's one thing I think the free market could handle, it's letting people decide what kind of tree they want to buy for Christmas," Addington told FoxNews.com. 

According to the Federal Register, the new board is supposed to launch a "program of promotion, research, evaluation, and information designed to strengthen the Christmas tree industry's position in the marketplace."

As part of that job, the board has been charged with improving the image of both Christmas trees and the industry itself. After three years, an industry-wide referendum will be held to determine whether to renew the program.