Obama says stimulus to include energy savings

By Tom Doggett and Ayesha Rascoe

WASHINGTON (Reuters) - U.S. President-elect Barack Obama said on Wednesday that his economic stimulus package will include investments designed to save billions of dollars in energy costs and create jobs quickly.

At his first press conference in 2009, Obama said "a lot of the investment" in the stimulus package would be in energy, health care and education, which he called "things that we need to be doing anyway."

Obama offered few details, but did pledge to upgrade all federal buildings so they will use less energy.

"If we do that effectively then over the long-term we are going to save billions of dollars in energy costs for the federal government and for taxpayers," Obama said.

Obama has pledged to invest $150 billion over 10 years to develop alternative energy sources, which he claims will create 5 million "green" energy jobs.

U.S. Sen. Dianne Feinstein, a California Democrat and Sen. Olympia Snowe, a Maine Republican, this week urged Obama's transition team to include energy efficiency investments in the stimulus package.

The senators said they supported more money to help senior citizens and low-income families weatherize their homes with insulation and energy-saving windows and water heaters.

Obama has said he plans to weatherize 1 million homes annually.

Weatherizing homes and revamping government buildings to save energy would immediately put to work hundreds of thousands of contractors who lost their jobs in the weak housing sector, experts have said.

The senators also called for boosting to $5,000 from $2,000 the tax credit for new homes that reduce heating and cooling costs by 50 percent. They urged extension of the tax credit through 2011 and application to all of a home's energy use.

Feinstein and Snowe also urged raising the commercial building tax deduction for energy efficient property from $1.80 per square foot to $3 and extended through 2011.

Sen. Barbara Boxer, a Democrat of California, also supported investing in clean energy technology to increase employment and fight global warming.

"In these challenging times, green jobs represent the kind of win-win solution we need," Boxer said at a hearing. "They put people to work here in America. You can't outsource installation of a solar roof on your house to another country."

Energy investments are expected to be discussed on Thursday at a hearing on energy security before the Senate Energy and Natural Resources Committee.

Steven Chu, Obama's pick to be his energy secretary, went to Capitol Hill to meet with members of Illinois' congressional delegation to discuss clean coal technology.