Signup for Email Alerts

Email: Zip:
Logo
Fear and Courage in the Democratic Party

Obama's Auto Plan Neither New Nor Bold

Barack Obama got huge coverageyesterday for "standing up" to the auto industry by calling on them to accept tighter fuel efficiency standards for cars and trucks - and doing it in their own backyard in Detroit. Although it's encouraging anytime a candidate calls for increasing fuel economy, we have to ask: is Obama's proposal really anything to coo about?


The core of Obama's plan is raising fuel efficiency standards to 40 miles per gallon by 2022 - and paying off American auto companies for doing this by funneling $3 billion in taxpayer subsidies to the big auto companies in exchange, primarily to alleviate their high health care costs.

Two problems: first, Obama's plan doesn't move anywhere near fast enough to address the twin challenges of global climate deterioration and reliance on oil. His plan is about the same as that proposed by the Bush administration (although the administration's plan includes huge loopholes that Obama's doesn't). The 2022 deadline is at least ten years behind what is technically feasible and at least that many years behind what is climatologically essential. The latest international climate report concludes that urgent action is needed to avoid mass extinction, melting ice caps, famine and disease. "We don't have the luxury of time," said Dr. Rajendra Pachauri, chair of the Intergovernmental Panel on Climate Change. What's more, research by the Union of Concerned Scientists shows that currently available technology could raise fuel efficiency standards to 40 miles per gallon by 2012, while still producing net savings for consumers.

Indeed, that savings points to the second gap in Obama's plan: he focuses on the costs to the auto companies without focusing on the costs of their inaction to the consumer: according to the Union of Concerned Scientists, raising fuel efficiency standards to 40 miles per gallon would save each driver between $3500 and $6500 over the life of the vehicle - way more than the $500-$2000 a car might cost with improved technology. If gas prices continue at their current high levels, savings would be even greater, especially for farmers, Westerners, and people who use their vehicles for business - or anyone else who drives long distances. (In fairness, Obama did propose to help consumers with some tax incentives for efficient vehicles).

A third gap is Obama's continuing obsession with promoting ethanol as a substitute for gasoline. Not only are ethanol's cost savings non-existent, it's dubious that ethanol -cellulosic or otherwise - has any real environmental benefit. A recent study in the Environmental Science and Technology journal found that ethanol produces more deadly pollutants than regular old dirty gasoline. And it's benefits for the climate are tiny, and maybe non-existent. Finally, it could have devastating impact on Nature by causing farmers to expand agriculture into formerly pristine wilderness, both here in America and in the world's diminishing tropical forests (which also serve as the planet's lungs).

Worst of all, parts of Obama's approach are proven failures. Bill Clinton and Al Gore tried it in the 1990's with their Partnership for a New Generation of Vehicles. The program gave the auto companies more than $1 billion to spend on research into fuel efficient cars - but after eight years, fuel efficiency had actually declined slightly, causing a bipartisan effort in the House of Representatives to slash funding for the program to succeed (though funding was later restored in negotiations with the White House and the Senate). The Bush administration then recycled the subsidies-for-efficiency plan with its Freedom Car proposal to funnel another $1 billion in taxpayer subsidies to the auto companies to create a more efficient car, but this program had similar results: more money in auto execs pockets, no improvements in efficiency.

Should U.S. taxpayers should really have to pick up the bill for the auto industry's inefficient health care schemes?" As Malcolm Gladwell discussed in a brilliant August 28, 2006 New Yorker piece, the auto companies are mainly to blame for their high health care costs: they chose a single company-by-company health insurance package instead of economy-wide health care because they were afraid that collective health care - though it might be more efficient - would put too much power into the hands of workers.

Nevertheless, Obama may be justified in trying to bribe the auto companies - after all, their opposition (along with the United Auto Workers' union) has been the main factor preventing Congress from passing significantly higher fuel efficiency standards, despite overwhelming public support. But it's doubtful that it will work. All Obama got from the automakers for his trouble was criticism. "We think it should be based on objective criteria and not politically attractive numbers," Alliance of Automobile Manufacturers Vice President Gloria Berquist told The Chicago Tribune. "It's not attainable."

All in all, Obama's "new" proposals is a great example of what's likely to happen with all his other attempts to forge some kind of new center. He'll do lots of reaching out, propose some grand bargains, and find that Republicans and corporations throw them back in his face - all he will have achieved is to move the starting point for negotiations closer to their direction, which opens a broader question: do we want such a terrible negotiator as president?

Meanwhile, both Hillary Clinton and especially John Edwards have supported more aggressive means to reduce global warming and our dangerous reliance on oil. Edwards was on record in favor of 40 mpg standards during his 2003 campaign and has proposed achieving 40 mpg by 2016 (although his plan is more ambitious than Obama's, it includes many of the same weaknesses like support for ethanol and taxpayer subsidies for the auto industry) ; Clinton has generally supported higher fuel efficiency standards as well (usually without the subsidies Obama is asking to go along with them). If past is prologue, the auto industry will fight any and all of these proposals no matter how many sops they're offered until the very last minute. It's what they did with seatbelts, airbags, and catalytic converters.

If we're to truly tackle these problems, we're going to need someone who can organize and beat the auto companies not repeat the failures of coddling them.

Paid for by Democratic Courage PAC (www.democraticcourage.com), and not authorized by any candidate or candidate's committee.

Copyright 2007 Democratic Courage. All rights reserved.
2531 Q St., NW, Suite #205 * Washington, DC 20007 USA * TEL (202) 546-7765 * FAX (301) 576-4526
Email: glenn > at < dcourage dot com

Site best viewed with Firefox or Internet Explorer 6.1 or higher.