NEW YORK ( TheStreet) -- When it comes to clean energy funding, President Obama and the Republican deficit hawks in Congress can't seem to agree on much. There is a clear divide between the deficit hawks saying "spending is spending is spending" and the Obama administration, on the other hand, saying "spending is, in fact, innovation."

For investors, the political rhetoric is as influential as the clean energy logic, and it all can influence trading in clean energy stocks. Investors can't go straight from point A (a push from the Obama administration in favor of clean energy) to point B (guaranteed growth in a clean energy niche) and head to the bank with future profits. By all accounts, it's going to be a battle between the Obama administration and Congress over the budget request. On the other hand, for the deficit hawks to relegate the Obama administration's clean energy ambitions to a planned scrap heap of "wasteful" government spending can miss the forest for the carbon-sequestering trees.

There has been much action in relation to U.S. clean energy policy and the market implications in the past few weeks. The clean energy news flow reached its crescendo on Monday when President Obama introduced his new 2012 fiscal budget and requested $8 billion in clean energy spending. Solar, wind, electric car and lithium-ion battery makers, and industrial companies that focus on increasing the building efficiency in the commercial sector, would all be beneficiaries of President Obama's clean energy plan, partially to be funded by an elimination of tax breaks for oil and gas companies.

Lithium ion battery makers like A123 Systems ( AONE) and Ener1 ( HEV) would stand to benefit, in the long run, with the government encouraging an electric car hub and Obama's plan for one million electric cars on the road by 2015, even if they lack significant access to the passenger vehicle market today.

President Obama's budget calls for 9 gigawatts of clean energy projects on federal lands to be permitted by year-end 2011, a drive that would be in line with the efforts of U.S. solar project developers, like First Solar ( FSLR), MEMC Electronic Materials ( WFR) and SunPower ( SPWRA), though by no means an opportunity limited to them, any by no means a reason alone to invest in these stocks, given their volatile profile and historical reliance on a European market that remains in flux.

Companies that have seen been building efficiency business grow as commercial properties become more energy conscious, such as Hubbell ( HUB.A), Acuity Brands ( AYI), and Cooper Industries ( CBE), would benefit from President Obama's building efficiency budget request.

There's also an argument being made that if electric cars are going to find legislative support, it might require a concession to the traditional energy lobby in the form of support for natural gas engine-powered vehicles. The Natural Gas Act, which failed to find a legislative platform last year, is the ultimate prize for natural gas transportation stocks like Westport Innovations ( WPRT), Clean Energy Fuels ( CLNE) and Fuel Systems Solutions ( CLNE). It would double the subsidy that expired at the end of 2010 for the purchase of natural gas vehicles, making the vehicles competitive with traditional diesel-powered fleet vehicle prices.

Yet it's easier said than done when it comes to the President's budget being more than a wish list. Last week, Congress asked for $900 million in cuts from the Obama administration's fiscal 2011 clean energy budget. Within the budget cutting proposed by the House Appropriations Committee last week, the clean energy budget scalpel was among the sharpest line items, representing a decrease of 37.5% of President Obama's clean energy budget.

President Obama is walking a fine line, by freezing domestic spending for five years, acknowledging the huge debt load for the national government, and at the same time, saying the country needs to distinguish between excessive spending and the history in this country of using public money to innovate. In fact, on Tuesday, President Obama said a "scalpel" is what he wants when it comes to the budget. At a press conference that largely focused on the budget, President Obama used the catch phrase, "We need to use a scalpel and not a machete on the budget."

As New Yorker financial columnist James Surowiecki noted in a recent column, even Tea Party members would have to acknowledge that the idea of the government spending to innovate and foster infrastructure improvements is a tradition that dates back to the Founding Fathers and the philosophy of Alexander Hamilton, who argued that the government needed to encourage new inventions. It's a tradition continued through canal building during the presidency of Abraham Lincoln and the national highway paving of Dwight Eisenhower's administration, as President Obama has noted. Eisenhower also helped to spur the Cold War era of government-funded scientific research. The New Yorker writer asked, can "fiscal responsibility" actually be irresponsible?

It's not at all clear that the American public is in lock step with the Republican deficit hawks on the issue of clean energy spending.

A recent Gallup poll of Americans indicated that there is widespread support for alternative energy legislation, and it's support above all other legislative priorities.

Passing an "energy bill that provides incentives for using solar and other alternative energy sources" had the most bi-partisan support among Americans polled by Gallup in mid-January. Roughly 83% of Americans support the idea, an even higher percentage of Americans than support overhauling the U.S. tax code and speeding up the withdrawal of troops from Afghanistan, which had the second- and third-highest levels of public support.

Only 15% of those included in the Gallup poll were opposed to an alternative energy focused energy bill.

Notably, the alternative energy concept had more widespread support than legislation to support traditional oil and gas drilling. The Gallup poll found that 65% of Americans support a bill to expand drilling and exploration for oil and gas, while 33% oppose it.

Gallup concluded from its poll results that "With Republicans in control of the House of Representatives and Democrats in control of the Senate, it would appear the proposals with the best chances of passing are those that generate strong bipartisan support. That is clearly the case for a bill that would provide incentives for increased use of alternative energy."

Granted, polling is all in how the question is asked, and if Gallup has phrased their question to the American public, as the deficit hawks will, "If U.S. debt is going to be downgraded by the rating agencies to the quality of a banana republic and the mountain of debt we are under will bankrupt the country, would you support more spending on clean energy?" the poll results might be different.

A recent analyst by FBR Capital Markets of the situation on the Hill noted that the Congressional budget cut request would cut nearly $2 billion from the EPA and $3 billion from the Department of Energy. Even before the new Obama administration budget was released on Monday, FBR Capital Markets wrote, "Although we expect the President to continue lobbying for expanding clean-energy research and manufacturing, we believe that downward spending pressure makes very large new programs, such as electric car grants and natural gas vehicles, unlikely."

With the price of brent crude over $11, unrest in the Middle East and summer driving season not that far away, and after the failure of comprehensive energy legislation last year, the issue isn't going away. Indeed, the divide between the Obama administration and the deficit hawks, and the widespread support among the American public for alternative energy -- even before the $4 price of gasoline summer season begins -- raises the question, Is spending on clean energy just more spending, or is it much-needed innovation?

What do you think? Take our poll below to learn what TheStreet thinks...

Is spending on clean energy just more spending, or is it much-needed innovation?

Spending is spending is spending.
It's much-needed innovation.

-- Written by Eric Rosenbaum from New York.

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