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Obama Raises CAFE Standards for Vehicles While Debt Ceiling Talks Go On.

President Obama announced new CAFE (Corporate Average Fuel Economy) standards that will require car makers fleets to 56.2 miles per gallon by 2025.

Just so we all know what happened, in the middle of the debt talks, in the middle of the markets dropping, in the middle of credit rating companies looking to downgrade the US bond rating, Obama gleefully enacts a standard that is twice the standard of today. As of yet, no major car company has shown the ability to meet the 2016 mandated standard of 35 mpg so why not push for an even higher standard?

Obama called the new standards the product of compromise:

He said: “So as we look to close the deficit, this agreement is a reminder of why it’s so important that we have a balanced approach. We’ve got to make serious spending cuts while still investing in our future; while still investing in education and research and technology like clean energy, which are so important for our economy.”

This agreement ought to serve as a valuable lesson to leaders in Washington,” he said. “You all are demonstrating what can happen when people put aside differences. These folks are competitors. You got labor and business. But they decided, ‘We are going to work together to achieve something important and lasting for the country.’”


Let’s be clear on something. CAFE standards are set by the government irrespective of the feelings and beliefs of the auto manufactures. The authority to enact the standards rests solely with the government. They are not set by two equal parties with similar interests coming to a negotiating table to work out a compromise. They are the result of the government saying to the car companies “we think that you can make cars that get ‘x’ miles per gallon” and the car companies telling the government why that goal may be unrealistic. This is not two entities coming to an agreement. This is the government saying “you’ll take it and you’ll like it.”

If CAFE standards were set by compromise and negotiation, Obama would have walked away, threatening to not accept anything other than what he wanted. After all, a leopard cannot change it’s spots.

It is the utter carelessness of people that often amazes us.

Can we do it? Well, we put a man on the moon; of course we can do this,” said Fadel Gheit, senior analyst covering the oil and gas sector at Oppenheimer. “If the will is there, we will be successful and this is the best way to achieve this by pushing and cajoling.”

Gheit apparently doesn’t realize that we can’t put a man on the moon because of the administration’s lack of vision for NASA and the lack of accountability (which may lead to the axing of the James Webb telescope.) We don’t have a space vehicle that can carry any man, anywhere and are paying the Russians to take our astronauts to the International Space Station at a cost of $56 to $63 million dollars per astronaut.

The administration wants manufactures to look more to alternative energy like battery powered cars and perhaps hydrogen cars. Of course, battery production is one of the nastiest, ecologically unsound products that are being made, but we won’t mention that too loudly. The bigger worry is “where is the energy to charge the batteries going to come from?”

Today as our electrical energy needs continue to rise, at Obama’s direction, the EPA is waging war on coal fired power plants. We are going to lose massive amounts of available energy into the electric grid as the need for energy will be rising exponentially. While Obama touts the savings at the pump that higher CAFE standards would bring, he is totally discounting the higher energy costs in general to get to the CAFE standards.

We simply are not buying his attempt to have us look at one hand containing gas savings while ignoring higher electricity prices that are harming people just as much as gas and oil prices.

And how much will all this add to the actual cost of the car?

The Center for Automotive Research projected bringing cars and trucks to a 56 miles per gallon CAFE standard would cost about $6,700 per vehicle. The study has been criticized for overestimating the cost of technologies.

EDITOR’S NOTE: The Center for Automotive Research (CAR) has responded to the claims that their numbers are inflated. That response can be found here. The estimate is in today’s dollars. We believe that if anything, CAR has underestimated the additional costs.

With incentives, the much touted Chevy Volt is being sold for around $34,000. The all battery powered Nissan Leaf costs about $32,000. CAR’s predicted increase of $6,700 would be an increase of roughly 20% over the current costs of the two vehicles. Middle income families can barely afford the Leaf and Volt now, and the solution is to put another $6,700 in today’s dollars on top of the current prices?

Obama’s new CAFE standards are going to cost American’s more at the car dealer’s lot while his energy policies are going to cost Americans more to keep the electricty to run electric cars, light their homes, cool and heat their homes etc. But Obama doesn’t want you to put those ideas and facts together.

While elected officials are working on a deal to save the financial crisis, Obama is out touting a deal that is going to cost each and every one of us more.

That “hope and change” working for ya yet?



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  1. […] attention focused elsewhere, he effectively dealt a crippling blow to the auto industry, via Raised on Hotcakes: President Obama announced new CAFE (Corporate Average Fuel Economy) standards that will require […]

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