Congress Must Honor Fuel Efficiency Commitment in Bailout

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The Pew Environment Group opposes diverting funds set aside for fuel efficiency retooling support to a general financial bailout for the “Big Three” automakers unless the original intent of those funds – helping the automakers to be more competitive through better fuel efficiency – is honored.

“Walking away from a commitment to greater fuel efficiency isn't in America's or Detroit's larger, longer-term interests,” said Phyllis Cuttino, Director, U.S. Global Warming Campaign for the Pew Environment Group.  “After thirty years of inaction, Congress passed an energy bill last year that finally put automakers on a path to progress, which would save American taxpayers billions at the pump, reduce our dependence on oil and help produce the cars that Americans want to buy.  If the fuel efficiency funds set aside in last year's historic energy bill are used to bailout the Big Three, the next Congress and the new Obama Administration must immediately replenish them.”

Last year, Congress overwhelmingly passed the Energy Independence and Security Act of 2007 raising fuel efficiency standards for the first time in more than 30 years to reach an industry-wide average of at least 35 miles per gallon (mpg) by 2020.  To aid the domestic auto industry in retooling its factories the 2007 bill contained $25 billion in financial support. This money has yet to be released from the federal government, and the Bush Administration is now insisting that these funds should be the source of assistance to the auto industry.  

"If this Congress and the Bush Administration tap the 2007 fuel efficiency funds for a general bailout, it must come with a specific fuel efficiency condition – automakers must drop their legal challenges in both state and federal courts to California's global warming vehicle standard.  Simply barring the Big Three from using diverted fuel efficiency funds to support their ongoing appeals or mount new challenges to state global warming laws, as some have suggested, does not adequately protect the taxpayer.  Money is fungible,” said Cuttino.

The California global warming vehicle standard would require a 30 percent global warming pollution reduction from new passenger vehicles by 2016, resulting in cleaner air and increased fuel savings at the pump.  The standard has been adopted by 14 states and the District of Columbia.  Together, these states represent more than 40 percent of the U.S. auto market.  However, the Big Three are currently spending large sums opposing the global warming vehicle standard in both state and federal courts.

“Efforts to delay manufacture of more fuel efficient cars only lengthens their road to economic recovery,” said Cuttino.

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