From the Detroit News
WASHINGTON -- House leaders agreed late Friday to hike fuel economy standards 40 percent by 2020 to a fleet-wide average of 35 miles per gallon, a landmark deal that clears the way for a House vote by Wednesday.
The increase would be the first for passenger cars since 1985, marking a dramatic defeat for automakers, which have successfully foiled efforts to force increases for more than two decades.
U.S. Rep. John Dingell, D-Dearborn, and House Speaker Nancy Pelosi, D-Calif., finalized an agreement for raising corporate average fuel economy standards during a telephone call Friday evening.
The deal will be very expensive for automakers. GM chairman and CEO Rick Wagoner has said a similar bill could cost the Detroit automaker more than $40 billion over the next decade. A Bush administration analysis of a similar proposal said it could cost automakers more than $100 billion.
Automakers grudgingly decided to support it because there were no other options, and their political capital is waning. They have criticized the CAFÉ system, saying it distorts the marketplace by forcing them at times to offer incentives to sell smaller cars in order to meet the requirements.
It will no doubt hike the price of cars by forcing automakers to add expensive items like gasoline-electric hybrid engines and likely require automakers to make more lighter, smaller vehicles. It may force Detroit to shrink production of its SUVs and trucks, its largest most profitable vehicles.
If passed, the bill would give Democrats a big achievement to tout to voters who have put up with skyrocketing gas prices.
It would also hand President Bush a domestic achievement that would surely be part of his legacy, since it largely dovetails with his State of the Union proposal in January to hike fuel efficiency standards by an average of 4 percent per year over 10 years.
This also doesn't do jack to lower gas prices. We need less big government and less democrat/Bush sneering of American cars. Let the market decide.
If you want to lower gas prices, the first thing to do is open up domestic energy sources. ANWR, Coal, and especially nuclear. Put more research into cold fusion, and then afterward tell OPEC to perform unnatural acts on themselves.