Oversight Committee Expands Investigation into Secret CAFE Standards Rulemaking

Concern that new rules will hurt safety, increase consumer costs

(WASHINGTON)—The House Oversight and Government Reform Committee has expanded its investigation into a new regulatory framework supported by auto manufacturers and the Obama Administration, saying the structure was agreed to in secret, without legal authority, and with serious consequences for American consumers. Committee Chairman Darrell Issa (R-CA) wrote to the White House August 8 seeking answers to two dozen questions about new Corporate Average Fuel Economy (CAFE) standards announced July 29.

Issa also said he was concerned that government ownership interest in General Motors and Chrysler at the time of the negotiations created a troublesome conflict of interest that required enhanced transparency.

“The impact of this agreement on the ability of American businesses to create jobs throughout the automotive production and sales chain is also deeply troubling,” Issa said. “If consumers do not buy the vehicles that manufacturers are required to produce, sales will fall, production will slow and manufacturers will be forced to eliminate jobs,” he added.

In the letter to White House Counsel Kathryn Ruemmler, Issa pointed to comments made by two prominent auto industry experts saying consumers had been omitted from the new fuel efficiency rulemaking process. He also pointed out that the Obama Administration has refused to reveal the estimated consumer cost increase from the rules.

“Like me, [consumers] are deeply concerned that a deal has been struck between the Administration and special interests and that the rulemaking process will be a mere formality,” according to the Kelley Blue Book, Issa noted. The Center for Progressive Reform called the new standards, “the result of raw political wrangling, not the rational rulemaking process,” Issa wrote.

Chairman Issa and the Center have both expressed concern that the rulemaking occurred outside the jurisdiction of the Administrative Procedures Act (APA).

“If in fact the CAFE standards are the result of political haggling and not the application of proven science to the laws passed by Congress, then the Administration stands in violation of the [APA],” he wrote. “This approach appears to be exactly the type of activity that the APA was designed to prevent. Moreover, the Administration’s unusual insistence that auto manufacturers forsake their statutory right to challenge the final rules, before they are even drafted, is startling in light of the obvious procedural and substantive concerns with the Administration’s actions,” the letter said.

The Committee launched its investigation August 1 with document preservation letters sent to automobile manufacturers who publicly announced an agreement with the Obama Administration. A copy of one such letter is available here. Chairman Issa requested a response from White House Counsel Ruemmler within two weeks. A copy of the letter is available here.

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Correction: The letter was sent August 11, 2011.