Obama Mileage Rule Called Coercion Favoring Bailed-Out Carmakers

A proposed rule requiring automakers to double their average fuel economy by 2025 is unrealistic and stemmed from a secret deal favoring companies receiving U.S. government bailouts, according to a report released today by House Republicans.

The writing of the rule, which the White House plans to release next week in final form, was “a raw political process designed to appease environmental extremists,” said the report, written by the staff of House Oversight and Government Reform Committee Chairman Darrell Issa, a California Republican.

Issa, who became a millionaire by selling car alarms, has been a consistent critic of the corporate average fuel economy, or CAFE, rule proposed last year for model years 2017-2025.

“The impact of this process will not be immediate but will be felt by manufacturers forced to make, dealers forced to sell, and consumers forced to purchase far different, more expensive and less safe vehicles,” the report, citing emails between automakers and administration officials, said.

Boosting average fuel economy is part of President Barack Obama’s plan to reduce oil imports and use.

Issa’s report criticized the roles of environmental groups and California, which has power to regulate vehicle emissions, in a rule-writing process that included private meetings between White House officials and auto executives.

$192 Billion

The rule, and one that took effect this year for an earlier period, could together cost as much as $192 billion, according to administration cost estimates. The administration has said the 2017-2025 rule would save as much as $515 billion in fuel spending as they add an average of $2,000 to the price of each new passenger vehicle by 2025.

The rules written by the Environmental Protection Agency, California, and the U.S. National Highway Traffic Safety Administration had the support of the United Auto Workers union, whose president, Bob King, called them good for the economy, national security and the environment.

Clark Stevens, a White House spokesman, declined to comment on the report yesterday because he hasn’t seen it.

“Despite the efforts of a small few who are apparently opposed to steps that will protect Americans at the pump and reduce our reliance on foreign oil, the administration will continue to take steps to support this unprecedented agreement and ensure these savings for consumers are realized and the cars and trucks of the future are built here in America,” he said in an e-mail.

Republicans are attacking an agreement that saves consumers money, creates jobs and decreases dependence on foreign oil, Maryland Rep. Elijah Cummings, the Oversight Committee’s senior Democrat, said in an email.

California’s Leverage

“Any allegations that the White House is seeking to weaken the auto industry are simply ridiculous,” Cummings said. “This is the White House that saved the auto industry from its near- collapse.”

A year ago, executives from companies including General Motors Co. and Chrysler Group LLC, which received U.S. bailouts in 2009, stood with Obama at the Washington Convention Center to tout their agreement on the fuel-economy rule.

Daimler AG and Volkswagen AG, both German automakers, didn’t sign agreements, saying the plan gives an advantage to light trucks, primarily made by U.S.-based automakers.

That agreement, Issa’s report concludes, violated U.S. rule-writing procedures intended to provide transparency.

California, the most populous state, previously had stricter vehicle-emissions standards than other states and retains the right to write its own standards if it doesn’t like the national ones. That power allowed it to act as a “gun to the head” of automakers in pushing for tougher rules, the report concluded.

Nobody Ecstatic

The agreement broke a decades-long logjam on fuel-economy regulations, said Roland Hwang, transportation program director at Natural Resources Defense Council, one of the groups involved in the discussions.

“No one wants to see Congress fighting progress toward fuel efficiency, especially when the industry that is regulated supports the agreement,” Hwang said.

California was involved in the negotiations at the insistence of the automakers, who wanted the state to agree to a single national standard to avoid having two sets for every vehicle for the U.S. market, said Daniel Becker, director of the Washington-based Safe Climate Campaign.

“None of us is ecstatic that we got everything we wanted, but all of us are willing to live with it, except Mr. Issa,” Becker said.