Print 109 comment(s) - last by mindless1.. on Jul 6 at 7:46 PM

President Obama wants to make gas guzzling vehicles go extinct with tough new CAFE rules.

Michigan Governor Rick Snyder (R) is concerned the bill could cost American jobs.  (Source: Rick Snyder via Flickr)

The standard could also lead to more crash deaths, as automakers say such standards lead to cuts in material density and safety features to save on weight. The resulting cars are more fragile.  (Source: Car Insurance Comparison)
Plan would save on pollution, oil costs, but could increase vehicle costs, job losses, and accident deaths

The debate over the next Corporate Average Fuel Economy (CAFE) standard (set to run from 2017 to 2025) has just begun, and the political posturing appears to be in full effect.  From Department of Transportation (DOT) Secretary Ray LaHood to Senators and governors, everyone was expressing vocal thoughts about the "rough draft" of standards that United States President Barack Obama's (D) advisors unveiled on Monday.

I. 56 MPG = Lost Jobs?

Given that much of America is still recovering from recession, the topic of job loss is a sensitive one for many Americans, and is a powerful phrase to invoke in rhetoric.

Governor Rick Snyder (R-Michigan), whose state is home to America's three biggest automakers, was among 14 governors who wrote a cautionary letter to the heads of the DOT and the Environmental Protection Agency (EPA), employing this phrase to its full effect.

They write:

If fuel economy standards are increased too quickly, resulting in more expensive vehicles, many consumers can be expected to hold onto their older vehicles longer and defer buying a new car, which could put auto jobs across the country at risk.

The letter does not specify whether the proposed 56.2 mpg standard counts as increasing fuel economy "too quickly", but the timing certainly make it seem like a criticism of the plan.  Governor Snyder points to estimates that the plan will add between $2,100 USD and $2,600 USD to the cost of a vehicle, on average.  He urges the government to adopt a "sensible" standard, but stopped short at saying what such a standard would be in mpg.

The White House apparently decided to take the letter as a compliment, with spokesman Matt Lehrich writing:

We appreciate the governors' support for a national fuel economy standard that will save American families money at the pump and keep the jobs of the future here in America, and we share their commitment to preserving affordability and consumer choice.

II. Mich. Sen. Levin (D) Expresses Mixed Feelings on Bill

Sen. Carl Levin (D- Michigan) sent a separate letter to the White House demanding information on what data they used to decided on the proposed CAFE numbers.  In an interview he states, "We want to know how they arrived at that starting point. We will get that information one way or another."

The Senator admits, though, that without an agreement on the standard, the solution might be even less appealing.  If an agreement is not put in place, states like California will likely look to enact their own guidelines.  While this might please some state rights advocates, it is something automakers oppose -- they prefer a national standard.  Sen. Levin also opposes such provisions, stating, "[States] should not be given a waiver [to set their own standards]."

But without a binding national agreement, the government may have a tough time stopping states from doing so.  Technically the U.S. Environmental Protection Agency, a federal entity, has to approve of states' plans and grant them waivers from national standards.  A 2007 Supreme Court ruling in the case Massachusetts v. EPA, (No. 05-1120) found that it was illegal for the EPA to obstruct states from implementing their own standards by refusing to grant waivers.  The message seems unequivocal -- the EPA must grant waivers if states want them.

Sen. Levin adds that he is "very concerned" about the prospect of lost sales and jobs from the proposal.

III. Ray LaHood Wants Standard to be Finalized by July

Whether or not the final draft of the standard contains compromises, such as a lower mpg target, Secretary LaHood wants it to be delivered to the EPA and DOT by the end of July.

Secretary LaHood was critical in finalizing the current CAFE standard, which will require automakers to reach 34.1 mpg by 2016.  That standard, first set into motion by departing President George W. Bush (R) and finalized by President Obama, is estimated to cost automakers $51.5B USD over its course.

The tricky part about the standards is that while they cost on the vehicle side, they force savings at the pump.  The current standards are estimated to cut 1.8 billion barrels of oil by 2016.  With oil currently at $94.77 USD/barrel, that's a savings of $170.6B USD.  Further, by cutting fossil fuel combustion, the bill reduces emissions of toxic nitrogen and sulfur-containing gases that have been linked conclusively to chronic conditions such as asthma.

On the other hand, the bill may have raised other costs, as it is thought to have made the average vehicle less safe, contributing to automotive fatalities.

More extreme elements of the environmentalist movement have criticized both the previous and the pending CAFE provisions as being too weak.

The DOT Secretary offered cautious optimism that a compromise will be reached, commenting, "Our people are very professional at this. I think we proved that with the last CAFE standard. We got it right because we had every car company standing in the Rose Garden with the president. We want to get it right this time.""

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RE: Freedoms
By mindless1 on 7/2/2011 2:27:47 PM , Rating: 2
"Prevent" is a nonsensical word. Suppose every time you leave your home, your neighbor beats you half unconscious.

Your neighbor didn't prevent you from leaving home, but it's definitely going to change the way your choices are made, you no longer have the same freedom of choice as you formerly did.

Why doesn't everyone have the nicer cars you mention? Their higher cost is a primary factor. Since cars are sold in luxury and performance tiers even among similar types of vehicles, raising the prices of each does change what the average shopper will purchase.

Who is stopping them? A government that makes everything in their lives more expensive than it ought to be, by burdening the average taxpayer with paying for what benefits the wealthy.

Let's put it another way. The government isn't stopping anyone from choosing to buy a more fuel efficient vehicle if that is what they want, there is no reason why the government needs to mandate fuel economy for those who are fuel economy conscious to pick an economic vehicle and through sales rates, automakers will spend more R&D on increasing fuel economy.

We know that is not what people want, the industry is currently a reflection, a balance of what people want based on what they buy based on 100 years of experience. We can say "oh SUVs used to sell well and now don't so much", but that fact reinforces my argument, that consumers chose on their own to buy something else without any government intervention necessary.

Yes there was cash for clunkers, where many people just bought a newer SUV to replace their old one, not the highest fuel efficient vehicle they could find.

RE: Freedoms
By YashBudini on 7/2/2011 5:57:43 PM , Rating: 2
Every new car lot I pass is loaded with unsold SUVs and other vehicles that get poor mpg. Perhaps you haven't noticed.

Why doesn't everyone have the nicer cars you mention? Their higher cost is a primary factor.

The people that want these cars buy them. The cost includes a level of exclusiveness for status. Notice how their crappy mpg rating and gas guzzler tax has no impact on the vehicle. People buy want they want, and they sacrfice what they feel like sacrificing, which is why homeless people always have beer, cigarettes, and lotto tickets. What taxes have stopped them?

In the 70's Detroit said the cost of the catalytic converters would hurt car sales. Guess what? The cost of sheet metal changes totally dwarfs the cost of cats, even back then.

your neighbor beats you half unconscious.

Yeah it's tough living in a country with no guns.

RE: Freedoms
By mindless1 on 7/6/2011 7:46:57 PM , Rating: 2
If the new car lot has lots of SUVs, it is because the dealership orders lots of SUVs because they sell lots of SUVs, although at the same time I would expect the average car lot has plenty of smaller vehicles too, you just wouldn't notice them as much because they are smaller... a little car won't block you from seeing the SUV behind it, but the SUV would block your seeing the car behind it by a higher %.

False about "the people who want these cars buy them". While it is true that the people who buy these cars want them, the opposite is not true, there are lots of things in life that people want but cannot afford or in the case of vehicles, they don't have the extra garage, driveway or other space to store everything they'd "like" to own.

Homeless people always have these things? I suppose you watch too much TV and stereotype well, but there is a reason why homeless people tend to continue smoking and drinking, because that is a minor expense relative to things like making a house payment, nice clothes to wear to work, providing for a family, the car to go places, etc etc. Plus, statistically speaking mental illness is a large contributing factor to homelessness (at least before the recession in the US it was) and mentally ill people tend to drink and smoke more, IF they can manage to.

You wrote "what taxes have stopped them", while failing to grasp that ideally they would not be doing without all the things they do. Think about it, if you could survey all of them do you feel the consensus would be that they have everything they want? Your example is extremely self defeating in that they have almost nothing and you wanted to argue as though taxes must not stop them because they want not for anything, which is clearly not the case.

Sheet metal changes are a necessity to update a design, improve safety, etc. You can't argue away that cost as a reason to ignore cost of other things, but I fail to see how this fits into your argument because today a catalytic converter can be bought aftermarket for $100, a far cry from the total cost of all the mandates to push vehicle attributes beyond what the public wants.

Guns are not an answer to my example, rather that just escalates the situation until one person is dead and the other goes to prison. If you wield a gun and the neighbor backs down you can't (reasonably assume to) get away with shooting him, so he leaves and being the thug that was hassling you already, he comes back with a gun, waiting in hiding knowing that you are inside but you not knowing if or when he is outside.

"If a man really wants to make a million dollars, the best way would be to start his own religion." -- Scientology founder L. Ron. Hubbard

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