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January 25, 2009

Obama: You Know What The Struggling Auto Industry Needs? An Expensive New Mandate!

Okay, so that's not exactly how he'll put it but that's pretty much the net effect of his administrations plan to allow California and other states to set emission and mileage standards.

President Obama plans to instruct key federal agencies today to reexamine two policies that could force automakers to produce more fuel-efficient cars that yield fewer greenhouse gas emissions, according to sources who have been briefed on the announcement.

The move, which the White House has privately trumpeted to supporters as "the first environment and energy actions taken by the president, helping our country move toward greater energy independence," could reverse two Bush-era decisions that have helped shape the nation's climate policy and its auto market.

Obama will instruct the Environmental Protection Agency to reconsider whether to grant California a waiver to regulate automobile tailpipe emissions linked to global warming, sources said, and he will order the Transportation Department to issue guidelines that will ensure that the nation's auto fleet reaches an average fuel efficiency of 35 miles per gallon by 2020, if not earlier.

Yeah, they are going to study it. Sure. This was part of Obama's campaign and his new team at EPA is almost certain to grant the waiver.

And what might the cost of this waiver be?

Carmakers also contend that the law could increase manufacturing costs, which then would be passed along to consumers. Environmentalists counter by saying consumers would save money in the long run because higher purchase costs would be offset by lower fuel costs.

The Association of International Automobile Manufacturers, a trade group that represents Honda, Toyota and 12 other international manufacturers, objects to the law on the grounds that it would lead to "a patchwork of state laws" instead of one federal standard. Allies note that the auto industry is already under tremendous financial pressure, with car sales lagging, and can't afford to comply with new regulations

..."The net effect of his request would add between $1,000 and $5,000 to the price of every car sold in California," (CA Congressman Tom) McClintock said. "Automobile sales normally account for one-fifth of sales taxes paid in the once Golden State and total sales tax receipts are already down $1.5 billion over the last 12 months. Meanwhile, the governor is also asking the president to bail out California from its growing budget deficit. Just another day in 'reality-challenged' Sacramento."

No problem, we'll just add some extra money to the bailout.

Thanks Barack!

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posted by DrewM. at 11:33 PM

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