Candidate Notes on 06-S3694

06-S3694 on Jul 19, 2006

OFFICIAL CONGRESSIONAL SUMMARY: A bill to increase fuel economy standards for automobiles.

SPONSOR'S INTRODUCTORY REMARKS: Sen. OBAMA: At a time when the energy and security stakes couldn't be higher, CAFE standards have been stagnant. In fact, because of a long-standing deadlock in Washington, CAFE standards that initially increased so quickly have remained stagnant for the last 20 years.

Since 1985, efforts to raise the CAFE standard have been stymied by opponents who have argued that Congress does not possess the expertise to set specific benchmarks.

To attempt to break this two-decade-long deadlock and start the US on the path towards energy independence, we introduce the Fuel Economy Reform Act of 2006. This bill would set a new course by establishing regular, continual, and incremental progress in miles per gallon, targeting 4% annually, but preserving NHTSA (National Highway Traffic Safety Administration) expertise and flexibility on how to

meet those targets.

Under this system, if the 4% annualized improvement occurs over ten years, this bill would save 20 billion gallons of gasoline per year. If gasoline is just $2.50 per gallon, consumers will save $50 billion at the pump in 2018. By 2018, we would be cutting global warming pollution by 220 million metric tons of carbon dioxide equivalent gases.

In order to enable domestic manufacturers to develop advanced-technology vehicles, this legislation provides tax incentives to retool parts and assembly plants. This will strengthen the US auto industry by allowing it to compete with foreign hybrid and other fuel efficient vehicles. It is our expectation that NHTSA will use its enhanced authority to bring greater market-based flexibility into CAFE compliance by allowing the banking and trading of credits among all vehicle types and between manufacturers.

LEGISLATIVE OUTCOME:Referred to Senate Committee on Finance; never came to a vote.

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