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Senators Want Better Fuel Economy

By Joe Benton
ConsumerAffairs.com

July 20, 2006

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A group of U.S. senators want fuel economy standards for passenger cars and light trucks to increase by 4 percent each year, or about one mile per gallon. The average fuel economy of U.S. vehicles has been stagnant for several years as consumers have opted for more power and luxury rather than fuel economy.

The senators also want to eliminate the cap on tax credits for consumer who hybrid vehicles. The credits for the Toyota Prius are set to expire soon. Detroit automakers had backed the tax credit caps in an effort to minimize benefits to foreign automakers like Toyota.

Senator Barack Obama (D-Ill.) led the group as he introduced the Fuel Economy Reform Act of 2006.

"It is clear that the Achilles' heel of the most powerful country on earth is the oil we import and cannot live without," Obama said.

Cars and light trucks account for 40 percent of U.S. oil consumption and the new standards would begin in the 2009 model year if the senators have their way.

With the 2006 elections so near however, Congress is likely to have little stomach for passing tough new fuel economy standards, particularly in the face of strong opposition from U.S. automakers.

Detroit quickly characterized the bill as "unrealistic." Automakers have long opposed federal fuel economy rules and argued that increases would hurt U.S. jobs as well decrease vehicle safety.

Earlier this year, the National Highway Traffic Safety Administration set tougher mileage standards for pickups, sport-utility vehicles and vans for the 2008 to 2011 model years, raising the average from 21.6 mpg to 24 mpg. The 27.5 mpg standard for passenger cars has been the standard since 1986.

The new fuel economy proposal would allow NHTSA to set average standards for passenger cars as well and would require those standards to increase by 4% a year.

The bill also creates new tax incentives for automakers and auto-parts suppliers that update factories to produce fuel-efficient technologies.

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