April 27, 2006

Bush seeks to raise car fuel standards

By Matt Spetalnick

BILOXI, Mississippi (Reuters) - President Bush called for
legislation on Thursday to allow a boost in fuel-efficiency
standards for passenger cars, as he sought to soothe rising
anxiety among Americans about higher oil costs.

Bush proposed no specific figure for increasing mileage
standards for cars for the first time in 16 years. But
officials said they wanted broad changes in the long-standing
method for calculating how far cars should go on a gallon of

Environmentalists have long urged a substantial increase in
the fuel-economy standards, which they view as one of the most
effective means of reducing the U.S. appetite for foreign oil.

Each manufacturers' fleet of passenger cars must average
27.5 miles per gallon.

However, U.S. automakers have warned that higher fuel
standards might compromise safety because vehicles would
probably have to be lighter. Transportation Secretary Norman
Mineta echoed a similar view in a letter to congressional
leaders requesting formal authority to reform the Corporate
Average Fuel Economy (CAFE) standard for cars.

Some Democrats and some auto industry sources believe the
administration already has the authority to raise CAFE
standards and doesn't need congressional action.

Bush likened higher gasoline prices to a tax as he stopped
at a fueling station after touring hurricane-hit Biloxi,

He said that the Republican-led Congress was weighing some
ideas to ease the pain at the pump, including legislation on
the fuel standards.

"I encourage them to give me that authority," Bush said.
"It's authority that I use for light trucks. And I intend to
use it wisely if Congress would give me that authority."

The administration in March raised fuel standards for
popular-selling light trucks, including sport utility vehicles,
pickups and minivans.


Gasoline prices, which have vaulted above $3 a gallon and
are increasingly pinching consumers budget, are a key concern
for Bush, whose approval ratings have been mired in the low to
mid-30 percent range.

Bush, in an interview with "NBC Nightly News," said the low
poll ratings were partly due to high gasoline prices.

"There is a strong economy, and yet there is a certain
unease," Bush said. "I think some of it has to do with gasoline
prices," he said, also citing uncertainty in the Middle East
due to Iraq and Iran.

"I've been up in the polls, and I've been down in the
polls, but I'm going to continue to do what I think is right
for the country," Bush told NBC.

His Republican allies worry gasoline prices could put their
dominance in Congress at risk in November's midterm elections.

Bush rolled out some initiatives earlier this week such as
ordering a probe into price gouging and suspending additions to
the U.S. emergency stockpile of oil.

Democrats say Bush's plan falls short and called for
measures including suspending the 18 cent per-gallon gasoline
tax and eliminating industry tax credits.

Senate Republicans weighed in on Thursday with ideas like
giving taxpayers a $100 check and opening an Alaskan wildlife
refuge to oil drilling. They also called for suspending a
retail fuel tax.

In March, the Bush administration announced it would raise
fuel economy standards by 1.9 miles per gallon for sport
utility vehicles, pickups and vans -- the biggest gas guzzlers
-- between 2008 and 2011.

The change for light trucks featured a restructuring of how
fuel standards are calculated for the class, something Mineta
said in his letter to House and Senate leaders would also be
crucial for passenger cars to maintain safety.

General Motors Corp. said in a statement it would work with
the administration. "As changes are made, we want to be sure
this program is designed in the fairest way possible for all
auto manufacturers," company spokeswoman Sherrie Childers Arb

Some environmental and consumer advocates have urged that
mileage standards go up significantly since many passenger
cars, especially foreign-made vehicles, far exceed the current

(Additional reporting by Caren Bohan, John Crawley and
Maureen Lorenzetti)