House of Representatives Speaker Nancy Pelosi and Senate Majority leader Harry Reid have pulled a parliamentary stunt to cram through Congress the large increase in federal fuel economy standards which was passed in the Senate energy bill, but was rejected in the House. The standard is opposed by all automakers except Nissan , including GM, Ford, and Toyota. Compliance with the mandates is predicted by the automakers to raise the cost of a car by $5000 per car. The Senate version of the bill is backed largely by Democrats, who control both the Senate and the House. It has been vigorously supported by both Pelosi and Reid, both Democrats.
Ordinarily, when the House and Senate pass different versions of the same bill, the differences are resolved in a conference committee made up of members from both chambers. It had been expected that this routine process would occur with the energy bill, as it does with every other piece of legislation that is not identical as adopted in both chambers.
But, apparently not. Pelosi has announced that the House and Senate leadership, i.e., she and Reid, will fashion the ultimate bill to be voted on in both chambers, not a conference committee.
The stunt is specifically designed to overcome the opposition of one of their own. The Democratic Party leadership is scared of Rep. John Dingell, the chair of the House energy committee and also a Democrat. Dingell’s district includes Detroit. Dingell has forcefully and articulately argued that it is not fair to burden automakers and autoworkers with responsibility for environmental and energy problems which are largely the result of the activities of other industries and other countries, and upon which their products can have little impact if the others responsible are ignored.
This is the first time the Senate and House leader have used this ploy to get around a Democrat committee chair’s opposition. In the past, they’ve done it to circumvent Republican opposition to legislation.
Rep. Baron Hill of Indiana, another Democrat from a auto industry state, indicated that he still hoped the House version, which includes less strict fuel economy standards than that approved in the Senate, would be adopted. However, Representative Mike Rogers of Michigan, a Republican, asserted that the move “defies all logic,” and said that, “Nancy Pelosi just hijacked the House bill and now she’s going to carjack Detroit.”
Automakers have lobbied against the Senate bill and Dingell has a number of allies in opposing it. By taking the bill away from the conference committee, Pelosi and Reid diminish the impact the opponents can have on shaping the bill. Instead, it will simply be presented to both the House and Senate under circumstances in which the entire bill must be accepted or rejected. That puts individual legislators in the position of having to vote against a bill that may provide benefits to their own district in order to oppose the Senate fuel economy standards. For example, the Senate bill quadruples the present ethanol mandates. A Congressman from Iowa would have to vote against the bill that contains those mandates, a huge subsidy to corn farmers, to vote against the fuel economy standards.
The consequences of adopting the stringent Senate bill will be profound. Many auto industry analysts believe that the industry will experience a consolidation in the context of a global economy over the next 15 to 20 years akin to that which has occurred in the past several decades in the aircraft industry. They see the United States left with only one carmaker, China with another, the Russians elbowing their way into the German auto industry by leveraging their energy resources to buy in, and India having another major carmaker.
Adopting legislation that makes building and selling cars in the United States certainly isn’t a way to preserve jobs in America, or keep investment capital in the country. It’s no wonder that all Detroit automakers are looking to emerging countries as better investments than the United States. A country that adds $5,000 to the cost of producing a car is not going to be competitive in a world in which Tata of India is about to introduce a car that sells for $2,500.