Obama, Biden Sponsor Bill With Tax Breaks for Auto Fuel Gains
Monday, March 5, 2007
Printable Format
By Gopal Ratnam
March 5 (Bloomberg) -- Automakers in the U.S. would get tax breaks for raising fuel economy 4 percent a year under a bill whose sponsors include Senators Barack Obama and Joseph Biden, who are seeking the Democratic presidential nomination.
The proposal includes ``generous tax incentives'' to retool parts and U.S. plants to meet the tougher standards, Obama, an Illinois Democrat, said in a statement today. The legislation would allow different standards for different types of vehicles, rather than an average for an automaker's entire fleet of models.
The bill proposes ``a better system that combines protection for U.S. automobile manufacturing jobs with predictable increases in fuel efficiency standards for cars, SUVs and light trucks,'' Biden, a Delaware Democrat, said in the statement.
The proposal joins others in Congress to boost auto fuel efficiency. President George W. Bush, a Republican, called for a similar 4 percent increase in his State of the Union speech in January. A bill similar to what Obama and Biden proposed failed to get through Congress last year.
Senator Diane Feinstein, a California Democrat, and 10 other lawmakers are seeking to raise the standard for cars to 29.5 miles per gallon by 2010, from 27.5 mpg now. U.S. Representative John Dingell, the Michigan Democrat who is chairman of the House Energy and Commerce Committee, is considering a climate-change bill that would also address fuel economy.
The other sponsors of the bill backed by Obama and Biden are Richard Lugar, an Indiana Republican; Gordon Smith, an Oregon Republican; Arlen Specter, a Pennsylvania Republican; Norm Coleman, a Minnesota Republican; and Jeff Bingaman, a New Mexico Democrat.
Changes adopted last year for light trucks, which include pickups, minivans and sport-utility vehicles, will boost their required fuel economy to an average 24 miles a gallon starting with 2011 models. The current standard is 21.6 mpg.
To contact the reporter on this story: Gopal Ratnam in Washington at gratnam1@bloomberg.net