Making News: Obama Outlines 'Cash for Caulkers' Program

Imagine if the cooled or heated air in your home was festooned with little dollar signs. Now imagine those dollars signs leaking out of your house, one by one.

That's basically what happens whenever air escapes your home due to poor insulation or gaps around exterior doors and windows, for instance. It's a waste of both money and energy.

Now imagine that your monthly utility bills were reduced by $20 to $50 a month -- and those dollars were pumped back into the economy.

These are the goals of the new HOMESTAR program, dubbed "Cash for Caulkers". Today, President Obama outlined the details of the program, which aims to give cash rebates of $1,000 to $1,500 to homeowners who invest in energy efficient upgrades.

Cash for Caulkers follows last year's popular Cash for Clunkers program that spurred Americans to replace energy hogs with more efficient vehicles. Just as the Cash for Clunkers program created automotive jobs, this program aims to create manufacturing and home improvement jobs during these times of high unemployment.

The National Association of Home Builders is certainly in favor of the plan. "This has the potential to be a real shot in the arm for the home building industry," NAHB Chairman Bob Jones, who is a builder and developer in Bloomfield Hills, Mich., said in a press release. "It will help put America back to work and it will help families save on monthly energy bills."

According to NAHB economists, "every $1 billion in remodeling and home improvement activity generates 11,000 jobs, $527 million in wages and salaries, and $300 million in business income."

Is your home in need of an upgrade? If so, listen up: the administration proposes $6 billion for investment in upgrades such as new windows, insulation, high-efficiency HVAC systems, and -- of course -- caulking. The program is designed to support upgrades to 2 to 3 million homes, which would each save $200 to $500 a year in utility costs.

If 2.5 million households saved $200 a year, they would pump $500 million into the economy or into savings each year, for a payback time of 12 years on the $6 billion investment. If those same 2.5 million households saved $500 a year, that would add $1.25 billion into spending or savings each year, which means a payback time of 4.8 years on the investment.


Here are some details, according to Business Week:

"Under the first level of energy rebates, to be called Silver Star, consumers would be eligible for rebates between $1,000 and $1,500 for a variety of home upgrades, including adding insulation, sealing leaky ducts and replacing water heaters, HVAC units, windows, roofing and doors. There would be a maximum rebate of $3,000 per home.

"Under the second level, Gold Star, consumers who get home energy audits and then make changes designed to reduce energy costs by at least 20 percent would be eligible for a $3,000 rebate. Additional rebates would be available for savings above 20 percent."

Manufacturers, the home improvement industry and homeowners concerned about high utility bills will likely cheer the proposal, which must still be approved by Congress.

But fiscal conservatives concerned about rising national debt will likely boo it.

Where do you stand?