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$750-Million Break for GM

November 24, 1985

Ten years ago Congress set a goal of 27.5 miles per gallon average fuel efficiency by 1985. General Motors and Ford have pursued model strategies that caused them to fail to meet the law, despite having 10 years of "better ideas" on how to do it. They have purposely continued to make large, fuel-consuming models and have preserved a high per car margin.

This year, rather than face fines for not meeting the law (which would have been half a billion dollars cost to GM), they convinced the Reagan Administration to lower the standard to 26 m.p.g.

Would you believe that GM and Ford are now asking the Administration to take another step and keep the standard at 26 m.p.g. through 1990 so they can keep selling these large but highly profitable gas-inefficient autos?

And to rub salt in the wound, they also want to receive "credits" amounting to hundreds of millions of dollars for meeting this greatly reduced standard of 26 m.p.g.

Credits for cars with good mileage are used to offset any penalties a maker has for cars with poor mileage. Under the law, credits are allowed for exceeding the standard, which should be 27.5 m.p.g.; it was never conceived that credits would be given for eking out a mileage above 26 but still below the 27.5 m.p.g. level.

To block this use of "credits," the Senate has just adopted an amendment by Sen. Dan Evans (R-Wash.) to prevent the earning of credits only for cars above the long-established goal of 27.5 m.p.g. With the Congress and Administration groping for ways to cut the $5,706 in new federal debt per second, let's not let half a billion dollars in fines slip through our fingers. We should all hope that the Evans amendment makes it to the President's desk.

There is one more assault that GM is pushing on the public treasury. An amendment has crept into part of the tax reform bill that would exempt the No. 1 auto maker from payment of the gas-guzzler tax on certain of its heaviest and very inefficient station wagons sold between now and 1990.

Assuming GM's current share of the market, etc., this amendment could cost the Treasury another $280 million over the next five years! When you add this number to the $500 million in fines for not meeting the 27.5 m.p.g. standard, you can see that the taxpayers are going to be out three-quarters of a billion dollars from just one industrial giant that wants to bend the rules.


Member of Congress

9th District


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