State leaders say that complying with a 56.2 miles-per-gallon fleet guideline by 2025 is too aggressive and will cost jobs
If the White House has its way, the U.S.'s auto fleet will be forced to comply with a mileage standard of 56.2 miles-per-gallon by 2025. That doubles the current standard in place, which means automakers would have to make significant changes to their vehicle offerings over the next decade to meet the requirement. In a letter to President Obama (.pdf) on Thursday, all but one of Michigan's members of Congress indicated that they think that this proposed standard is unrealistic and would harm the economy.
To be sure, Michigan has a clear reason to be concerned about fuel standard rules: the state is the heart of the U.S. auto industry. Two senators (both Democrats) and 14 representatives (nine Republicans and five Democrats) say the Obama administration's 56.2 mile-per-gallon target "overly aggressive and not reasonably feasible." Michigan's governor signed a similar letter in June, along with 14 other governors.
This week's letter points to a recent study conducted by the Center for Automotive Research that indicates a very high mileage standard would harm the state and broader national economy. It concludes that if the fuel standard is raised to 62 miles-per-gallon, which is the high end of the range of proposed, it would cost the industry approximately 260,000 jobs and add $10,000 to the cost of a new vehicle.
The Environmental Protection Agency disputes that additional cost estimate, however, saying that car prices would rise by $3,000. Its analysis does show a vastly different car fleet by 2025 under this potential mileage standard, however. It would consist of 54% conventional hybrids, 8% plug-in electric vehicles, and 37% improved gas and diesel vehicles.
The only member of Congress from Michigan that did not sign the letter to the President was Rep. John Conyers, Jr. (D). His spokesperson says that the congressman is "standing up for higher fuel economy standards which will create jobs, not eliminate them." He points to another study by the Ceres Coalition that asserts the standards will benefit the economy. Still, as the only member of the Michigan delegation not to sign this week's letter, Conyers is taking a bold stance, especially considering that he represents a district that includes most of northwestern Detroit and part of Dearborn.
Some recent reports indicate that the Obama administration could be persuaded to relax this aggressive standard, however. In particular, it might allow light truck fuel economy to improve at a slower rate, making the overall burden of the new standard a little bit easier for automakers to comply with.
The bipartisan letter that Michigan's representatives to Congress wrote the president this week makes the stakes pretty clear. The U.S. automakers are deeply concerned about the coming standard. Will the letter provide the push the administration needs to reconsider its stance? Or does it agree with Rep. Conyers and believe that higher fuel standards will be a job creator instead of a job killer?
Getting the right answer here is particularly important considering that U.S. economic growth will likely struggle over the next decade as the nation slowly chisels away at the very high unemployment rate. In their letter, the Michigan reps are quick to point out that their state's unemployment rate currently stands at 10.5%, even higher than the national rate of 9.2%.
Image Credit: REUTERS/Rebecca Cook