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Senate Passes New Mileage Standards Bill

House expected to act next week, Bush on board with bill

By Joe Benton
ConsumerAffairs.com

December 14, 2007

The Senate voted 86-8 for the measure, which requires a gradual increase fuel mileage standards for cars and light trucks beginning with the 2011 model year.

Approval of the new corporate average fuel economy standards (CAFE) followed a compromise in which Democratic leaders agreed to remove tax increases and other provisions that would have required utilities to use more renewable fuels.

President Bush had threatened to veto the bill unless the $22 billion in tax hikes were deleted. He is now expected to sign the measure.

The bill would require a dramatic increase in alternative fuel production and provide incentives for production and purchase of energy-efficient products.

Reluctance in Detroit

U.S. automakers along with Toyota Motor Corp. reluctantly supported the new CAFE provisions in an effort to convince lawmakers that fuel economy standards should take precedence over greenhouse gas emission rules.

The automakers tried to craft a bill that would limit the scope of the Environmental Protection Agency to set fuel economy standards or states to limit green house gas emission.

After a series of court rulings, the EPA now has broad power to control greenhouse gas emissions from cars and trucks and automakers are concerned the agency will set rules tougher than those set by Congress or the National Highway Traffic Safety Administration.

Michigan Democrat Carl Levin had tried to win some protection for Detroit automakers by adding a statement that Congress and federal auto safety regulators have the final say over fuel economy rules.

Democratic Senator Dianne Feinstein of California, who is the primary sponsor of the fuel economy provision said the energy bill is not intended to prevent state or federal governments from imposing additional greenhouse gas rules.

In the end, the Senate dropped several other incentives aimed at helping the auto industry meet the new standards, such as a $25 billion loan guarantee program for updating assembly plants.

House Speaker Nancy Pelosi said the House would pass the bill next week, calling it "a cause for celebration for our country."

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