Obama’s astonishing takeover of the automobile industry, unlike his health care takeover, occurred without even a vote of Congress. Yesterday, to much fanfare, the administration announced its astonishing ratcheting up of vehicle fuel economy standards to 54.5 miles per gallon by 2025. These regulations — I call them “ObamaCar” — were accomplished not through open debate in Congress, but through corrupt backroom deals in which our elected officials had no voice.
ObamaCar will, according to the administration’s own estimates, add over $2,900 to the price of a new car. This low-ball estimate was created by using a brand-new cost-estimating methodology that uses arbitrary factors to produce a cost estimate for a vehicle considerably lower than the total cost of its individual parts.
An analysis by the National Automobile Dealers Association (NADA), which followed the government’s usual methodology, found the cost impact would be $4,800 per vehicle. But NADA also found that even the usual methodology has historically underestimated the actual cost impact by an enormous factor. NADA suggests a worst-case scenario of a $12,349-per-vehicle price jump.
Even using the EPA’s official low-ball estimate, NADA’s analysis found that “6.8 million licensed drivers will no longer qualify for a loan on that least expensive new vehicle.” So people will buy used cars, or drive their old cars longer. There will be less efficient, dirtier vehicles on the road, and reliable, affordable transportation will be much less accessible.
And if you can afford a car under ObamaCar, will it actually be a car you want to drive? Even the vaunted hybrids only get around 35 to 40 miles per gallon — if you’re light on the gas. Cato scholar Pat Michaels has observed that the third-generation Prius maxes out at 50 miles per gallon, but its vehicle weight is too heavy to get much more than that. At 54.5 miles per gallon, cars will be smaller, lighter, less crash-worthy, less powerful, and less comfortable than you can even imagine. A nice-sized family vehicle? Good luck.
How did this happen?
The Supreme Court opened the door for the misuse of the 1970 Clean Air Act with its decision in Massachusetts v. EPA in 2007. That five-to-four decision — an absurd act of judicial activism — allowed the EPA to transform the 1970 Clean Air Act into a global warming law, regulating fuel economy standards under the pretext of regulating tailpipe carbon dioxide emissions.
The principal author of the Clean Air Act, Democratic U.S. Rep. John Dingell of Michigan, said this of the decision back in 2008: “In last year’s Supreme Court decision in Massachusetts v. EPA, the court stated that it believed that greenhouse gases are air pollutants under the Clean Air Act. This is not what was intended by the Congress and by those who wrote that legislation. … So we are beginning to look at a wonderfully complex world which has the potential for shutting down or slowing down virtually all industry and all economic activity and growth.”
Then-Climate Czar Carol Browner oversaw the secret negotiations with the auto industry over these new global warming regulations. (She quietly resigned from the White House last year, just before her role in delaying Solyndra layoffs past the 2010 election was made public.)
Mary Nichols, the chair of the California Air Resources Board, was the other key player in a game of bad cop and really bad cop; basically, Browner told the auto industry that if it didn’t acquiesce to these new fuel economy rules, California would be given a free hand to impose its own, even more destructive regulations that — because many states have adopted California standards — would cripple the industry. Nichols told The New York Times that Browner “quietly orchestrated” the secret negotiations between the White House, regulators, and auto industry officials. “We put nothing in writing, ever,” Nichols said.
That was the first backroom shakedown. Yesterday’s rule is the result of a second round that followed closely on its heels, and at this rate the third round may be well underway.
Congress never voted for these absurd standards, which will drive vehicle prices through the roof for no meaningful environmental benefits.
Mitt Romney has an applause line in his stump speech about repealing ObamaCare. He should add another one promising to repeal ObamaCar.
Phil Kerpen is the president of American Commitment and the author of Democracy Denied.