Wednesday, August 29, 2012

Oversight Committee Report: Obama New Mileage Standards Process Violated Federal Law; Another Obama Power Grab

Oversight Committee Report: Obama New Mileage Standards Process Violated Federal Law.  Another Obama Power Grab?  Another "Solyndra-Like Investment?"

A staff report released earlier this month by the House Committeee on Oversight and Government Reform says that the process for the fuel economy and greenhouse gas emission standards, which the Obama administration realeased just yesterday, and sets a 55 mile-per-gallon standard requirement for vehicles by 2025, was a flawed process:
"...Evidence produced by the Committee indicates the process violated the spirit and possibly the letter of transparency and notice requirements in federal law.  Evidence also showed the Obama Administration selectively favored domestic automakers over foreign automakers, providing domestic firms with preferred access to information and Administration officials—in the wake of taxpayer-funded bailouts of General Motors and Chrysler... [T]he Administration’s flawed process will result in decreased consumer choice, increased vehicle costs, and diminished automobile safety..."
Oversight Committee leaders charged today that "the standards" were designed in secret.  Chairman Darrell Issa:
“...The rule finalized today by the Obama Administration will hurt American consumers by forcing them to drive more expensive and less safe automobiles. The Administration drafted these standards in secret, strong-arming automakers and short-circuiting the deliberative regulatory process to achieve a purely political result, abandoning sound science and objectivity to appease its political allies in the extreme environmentalist lobby...I support the goal of higher fuel efficiency, but this rule will only add to the burdens American small businesses and middle class families face under the heavy hand of the Obama Administration...”
Subcommittee Chairman Jim Jordan, R-Ohio:
"...Last October, our subcommittee examined the rushed political process used by the Obama Administration to impose its green-energy agenda through CAFÉ  [Corporate Average Fuel Economy]...Our predictions were correct:  The administration pushed safety concerns aside in secret dealings that failed to reach out to all stakeholders.  This is just the latest example of this administration trying to tell you what to buy rather than letting the market work...”
Last week the Oversight Committee asked the Obama Administration’s top regulatory review official  to further review the rules and the transparency of enactment.  They said the consequences of the Administration’s rule-making will be reduced consumer choice—with higher costs—and serious concerns about vehicle and passenger safety in order to meet the new requirements. In a letter to Boris Bershteyn, Acting Administrator of the Office of Information and Regulatory Affairs of the Office of Management and Budget, The Oversight Committee said:
"[We]...urge you to return the rule to the agencies for further consideration of its adverse consequences to consumers and the economy..."
The Committee told Bershteyn:
"...The Committee’s staff report details the flawed process used by the Environmental Protection Agency (EPA), the National Highway Traffic Safety Administration (NHTSA), the California Air Resources Board (CARB), and White House officials in developing both the MY 2012 to 2016 and the MY 2017 to 2025 fuel economy and GHG emissions standards.  From documentation available to the Committee, it appears that the rulemaking process violated the spirit – and possibly the letter – of transparency and notice requirements in federal law...Early in the process, the Administration sought to “quietly” reach an agreement with a few automakers, “holding no group meetings and taking care to not leak updates to the press...”
The letter also states that:
"...CARB [California Air Resources Board] Chairman Mary Nichols proudly explained that the negotiations were founded on a mutual commitment to 'put nothing in writing, ever.' An automaker confirmed this account, telling the Committee that an Administration official asked a representative from that company to stop taking notes at a meeting in May 2009...By initiating public comment only after the secret deliberations had produced an agreement, the Administration effectively predetermined the outcome of the rulemaking..."
Lawmakers told Bershteyn that the report illustrates how the Administration selectively favored the domestic automakers over foreign automakers, providing the domestic companies with preferred access to information and to Administration officials:
"...The Administration, according to one auto executive, took a 'divide and conquer' approached to automaker outreach, engaging the companies individually and providing differing information to each company...As explained by another automaker, 'The gov’t is playing we [automakers] off of each other.  They are telling us lies (we know cause we [automakers] talk amongst ourselves) to trick us into caving or giving us points [of] information.' ... By proceeding in this manner, the rulemaking yielded proposed standards that were described as 'not balanced and fair' but were instead skewed in favor of the domestic automakers..."
In a charge that is nothing short of revealing, the Oversight Committee asserts that:
"...Overall, the process of developing these standards was politicized, and not rooted in sound science or objectivity.  White House adviser Carol Browner expressly told one auto executive that the Administration sought to fundamentally rewrite the applicable Corporate Average Fuel Economy (CAFE) statute, saying: 'We need to get rid of that thing – CAFE.' ...  As another official recounted, 'The left, along with the states, is waging a serious campaign.  We cannot assume anything and shouldn’t believe EPA will base the decision on credible data – they will justify any range.  It is becoming increasingly political and EPA is aligning with CA.  Meanwhile, the Secretary of Transportation has abandoned the fuel economy playing field.' ...Further, it appears that the Administration rushed to finalize an agreement on an arbitrary timeline because, in the words of one EPA official, 'Obama wants to secure his legacy.'..."
Charges were leveled (in the letter), against the Obama standards, that the Committee says will cause the deaths of 240 more people each year:
"...These procedural deficiencies will have real and lasting consequences for consumers and the economy.  As the Committee’s report demonstrates, EPA and CARB effectively sidelined NHTSA [the National Highway Traffic Safety Administraion] - the lone agency statutorily charged with regulatory authority in this area – from the rulemaking process.  EPA officials openly questioned NHTSA’s regulatory expertise on vehicle safety, telling colleagues that EPA “still disagree[s] with the basic conclusions . . . that taking mass out of passenger cars will inherently result in higher fatalities.”[15]  This assertion contradicts substantial NHTSA research that there is a high correlation between vehicle size and fatality rates and that 'fatality rates will go up as a result of downsizing.'... Because EPA and CARB sought aggressive vehicle mass reduction targets estimates that the proposed standards will cause as many as 240 more automotive fatalities each year..."
Editorial Note:  "Edmunds . com" is an automotive consumer information web site.

In conclusion, the letter to Bershteyn urges further review of the standards:
"...As the Committee’s staff report and independent analyses demonstrate, ... the rushed and politicized nature of this rulemaking will have real consequences for vehicle safety, vehicle cost, and consumer choice.  Accordingly, we strongly urge you to utilize your authority to return the proposed rule to EPA and NHTSA for further consideration in a transparent and balanced manner that adequately addresses these issues..."
The Committee's urgings fell on deaf ears apparently, because the Obama administration rolled out the "Standards" yesterday touting:
"... groundbreaking standards that will increase fuel economy to the equivalent of 54.5 mpg for cars and light-duty trucks by Model Year 2025.  When combined with previous standards set by this Administration, this move will nearly double the fuel efficiency of those vehicles compared to new vehicles currently on our roads. In total, the Administration’s national program to improve fuel economy and reduce greenhouse gas emissions will save consumers more than $1.7 trillion at the gas pump and reduce U.S. oil consumption by 12 billion barrels..."
Obama, in fact, said:
“...These fuel standards represent the single most important step we’ve ever taken to reduce our dependence on foreign oil...This historic agreement builds on the progress we’ve already made to save families money at the pump and cut our oil consumption.  By the middle of the next decade our cars will get nearly 55 miles per gallon, almost double what they get today.  It’ll strengthen our nation's energy security, it's good for middle class families and it will help create an economy built to last...”
Further, the White House contradicts the Congressional assertions and is claiming that:
"...Achieving the new fuel efficiency standards will encourage innovation and investment in advanced technologies that increase our economic competitiveness and support high-quality domestic jobs in the auto industry. The final standards were developed by DOT’s National Highway Traffic Safety Administration (NHTSA) and EPA following extensive engagement with automakers, the United Auto Workers, consumer groups, environmental and energy experts, states, and the public. Last year, 13 major automakers, which together account for more than 90 percent of all vehicles sold in the United States, announced their support for the new standards.  By aligning Federal and state requirements and providing manufacturers with long-term regulatory certainty and compliance flexibility, the standards encourage investments in clean, innovative technologies that will benefit families, promote U.S. leadership in the automotive sector, and curb pollution..."
Transportation Secretary Ray LaHood:
“Simply put, this groundbreaking program will result in vehicles that use less gas, travel farther, and provide more efficiency for consumers than ever before—all while protecting the air we breathe and giving automakers the regulatory certainty to build the cars of the future here in America...Today, automakers are seeing their more fuel-efficient vehicles climb in sales, while families already saving money under the Administration’s first fuel economy efforts will save even more in the future, making this announcement a victory for everyone...”
Framing the Obama administration hype, however, is this tid-bit from Douglas A. McIntyre in Wall Street . com's newsletter about one of the hallmarks of the new mileage standards, the Chevy "Volt:"
"...Wall St. and the press would think much better of GM if it would confess the Volt blunder. It would be the start of a better relationship with both groups. Investors and the press believe that GM is not forthcoming about its largest problems — in Europe — either. All that people can observe from outside the situation is that GM continues to cycle through executives in Europe at a rapid pace. As GM’s problems multiply, so does the secrecy around them...The Volt was launched as GM’s car of the future. That future never came. While sales of hybrids like Toyota Motor Corp.’s (NYSE: TM) Prius continue to surge, GM cannot get consumers to buy a vehicle that plugs in like a toaster...In reality, the Volt is just one of scores of cars that manufacturers around the world launch that are almost immediate failures...Almost no one wants to own a Chevy Volt. The car has been a failure since it was first introduced..."
Yet this was the EPA Administrator, Lisa P. Jackson's statement yesterday on the day of release of the new Standards:
“..The fuel efficiency standards the administration finalized today are another example of how we protect the environment and strengthen the economy at the same time...Innovation and economic growth are already reinvigorating the auto industry and the thousands of businesses that supply automakers as they create and produce the efficient vehicles of tomorrow. Clean, efficient vehicles are also cutting pollution and saving drivers money at the pump..."
The White House was even more generous:
"The Administration’s combined efforts represent the first meaningful update to fuel efficiency standards in decades. Together, they will save American families more than $1.7 trillion dollars in fuel costs, resulting in an average fuel savings of more than $8,000 by 2025 over the lifetime of the vehicle. For families purchasing a model Year 2025 vehicle, the net savings will be comparable to lowering the price of gasoline by approximately $1 per gallon. Additionally, these programs will dramatically reduce our reliance on foreign oil, saving a total of 12 billion barrels of oil and reducing oil consumption by more than 2 million barrels a day by 2025 – as much as half of the oil we import from OPEC each day..."
In contrast to this, Oversight Committee Member, Rep. Mike Kelly (R-PA), owner of Mike Kelly Automotive in Butler, Pa., concluded:
“...There is an old saying that if you are not at the table you are on the menu. When the Obama Administration negotiated the new CAFE standards, they sidelined the statutory rulemaking process that had been in place for decades in favor of a political process whereby special interest groups and "czars" helped shape an industry standard that will adversely affect consumers on a sweeping scale. The new CAFE standards will limit choice, compromise safety, and increase costs for millions of Americans who are already struggling to get by in the Obama Economy. The American consumer was not given fair representation at the CAFE negotiation table, and they have since been put on the menu...”
And Oversight Subcomittee Chairman Jim Jordan put it this way:
"...Back in October, our subcommittee took a look at the way the Obama Administration was imposing its green energy agenda on a process reserved for NHTSA officials. Our predictions were correct – safety concerns were pushed aside, consumer choice was reduced and the future of auto manufacturing changed. We now have proof of this failed process and of the power-grab that has become a trademark of this administration...”
Are the "New Standards" a prelude to more "Solyndra-like" investments geared to line the pockets of political cronies, i.e., "crony-socialism," or is this a real attempt at energy independence?

What do you think?

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