National Automobile Dealers Association

Inside the Sausage Factory: The Obama Administration’s Auto Regulations

by Marlo Lewis on August 22, 2012

in Features

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Earlier this month, the House Oversight and Government Reform Committee issued a staff report on the Obama Administration’s fuel economy/greenhouse gas (GHG) regulatory program. The report, A Dismissal of Safety, Choice, and Cost, is the product of a “multi-year Committee investigation” that includes three hearings, a transcribed interview of EPA Assistant Administrator Gina McCarthy, and a review of more than 15,000 documents obtained by the Committee from the EPA, the National Highway Traffic Safety Administration (NHTSA), the California Air Resources Board (CARB), and 15 automobile manufacturers.

Some key findings:

  • The Administration performed an end-run around the law and ran a White House-based political negotiation, led by “czars” who marginalized NHTSA, the federal agency charged in statute with setting fuel economy standards.
  • Contrary to the statutory scheme Congress created, the EPA became the lead agency in fuel economy regulation and NHTSA was sidelined. Contrary to Congress’s preemption of State laws or regulations “related to” fuel economy, CARB became a “major player” and an “aggressive participant in the process,” allowing unelected state regulators in Sacramento to set national policy outside the federal rulemaking process.
  • The Administration violated the spirit – and possibly the letter – of the Administrative Procedure Act, Presidential Records Act, and Federal Advisory Committee Act by negotiating agreements on both the Model Year (MY) 2012-2016 and MY 2017-2025 standards behind closed doors with only a select group of stakeholders.
  • The new fuel-economy/GHG standards will add thousands of dollars to the cost of new vehicles. Consumers are likely to incur net financial losses unless annual gasoline prices reach $5-$6 per gallon.
  • Compliance with the new standards will require mass reductions that will, in turn, compromise vehicle safety. EPA and CARB officials mocked and belittled safety concerns raised by NHTSA.

In a law journal article and regulatory comment letter, I also make the case that the administration’s fuel-economy agenda trashes the separation of powers and administrative procedures. But the Committee’s report provides the first, detailed behind-the-scenes chronology of Team Obama’s fuel economy machinations, confirming what other critics suspected but could not document.

Some secrets of the sausage factory, though, may never come to light: “Despite multiple requests, the Executive Office of the President refused to provide any information on its involvement in developing the fuel economy and GHG emissions standards.”

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Auto Dealers Rebut “Concerned” Scientists

by Marlo Lewis on November 4, 2011

in Blog, Features

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The Union of Concerned Scientists (UCS) and seven other green groups sent the National Automobile Dealers Association (NADA) a letter (dated October 19) criticizing NADA’s opposition to President Obama’s plan to increase new-car fuel economy standards to 54.5 miles per gallon by Model Year (MY) 2025.

The UCS letter parrots the administration’s claims about the many wonderful benefits more stringent fuel economy standards will achieve during MYs 2017-2025. In a letter dated November 2, NADA points out that the claimed benefits depend on assumptions, such as future gasoline prices and, most importantly, whether consumers will want to buy the cars auto makers are forced to produce.

The UCS letter neglects to mention that, according to the administration’s own estimates, the MY 2025 standard would add at least $3,100 to the average cost of a new vehicle. NADA also notes other likely consumer impacts:

  • Vehicles that currently cost $15,000 and less effectively regulated out of existence.
  • Weight reductions of 15%-25%, with potential adverse effects on vehicle safety in collisions.
  • 25% to 66% of the fleet required to be hybrid or electric, even though hybrids today account for only 2-3% of new vehicle sales.

The “concerned” scientists also completely ignore NADA’s critique of the legal basis of Obama’s fuel economy agenda. [click to continue…]