Senate Could Strip Environmental Rules from Auto Industry Bailout

The Senate could strip the tough environmental clauses the House included in its $14 billion loan bailout of the auto industry, according to a report in the Los Angeles Times.

The money will come out of a $25 billion fund already authorized by Congress that was supposed to have been used to help automakers retool factories so they could employ workers making more fuel-efficient vehicles. (House Speaker Nancy Pelosi has promised to replenish the green makeover fund next year.) Now, the bulk of that money will be spent just to keep General Motors and Chrysler afloat. (Ford isn't expected to take a federal loan at this time.)

Now, the Senate, where the Democrats' majority is slim, could strip out requirements that Detroit suspend legal battles over environmental rules and comply with state air pollution laws that are more strict than federal rules. That provision in the law has everything to do with global warming politics.

California passed a tough greenhouse gas emission for vehicles law way back in 2002, but when it tried to enact it in 2005, it was blocked by the Environmental Protection Agency, which said because it lacked the authority to regulate carbon dioxide, it couldn't grant California a Clean Air Act waiver to set laws more strict than the federal government's standards. The Supreme Court rejected that argument, but the EPA still rejected California's waiver, on the grounds that Congress in 2007 voted to upgrade federal fuel economy standards. If California's waiver were approved, about a dozen other states would enact the same law, and it would have taken effect (had it not been held up by bureaucracy and courts for so long) with the 2009 model year cars being sold now.

The Senate bill doesn't include any provision for following state air pollution rules, only federal. The White House has said it will only support the Senate's version.

The holidays are coming, and it looks like if Congress is to pass this bailout, it will not include those tough provisions. If there's a silver lining, the Natural Resources Defense Council has estimated that Ford and GM would meet California's rules anyway, based on the plans they've submitted to Congress for greening their fleets and returning to financial viability.

COMMENTS ()