The House Subcommittee on Energy and Power begins a two-day set of hearings today on whether fuel economy standards for Americanmade cars ought to be eased in coming years to cut costs, as the auto industry is demanding, or left as they are to save gasoline.
The Carter administration has taken a "show me" stance, saying it has an open mind but insisting that the industry show that the standards are not economically practicable.
Joan Claybrook, director of the National Highway Traffic Safety Administration, said yesterday that industry began its lobbying effort before it had any data ready to back up its case. Since the end of the year, she added, the information -- "some good, some useless" -- has been coming in.
Claybrook, whose agency actually issued the mileage standard regulations, expects to have a preliminary assessment of the industry's case "within a month or so." But she added, "I'm not inclined to go change the standards every time someone sneezes."
Claybrook and four other administration witnesses will testify this morning. Among them are Charles Schultze, chairman of the Council of Economic Advisers, and Deputy Secretary of Energy James O'Leary, and representatives of the Environmental Protection Agency and the Federal Trade Commission.
Schultze also is expected to say he has an open mind on the question of whether the standards should be modified.
The industry claims that it would be much less costly if it were allowed to meet a 26-mile-per-gallon standard for its auto fleet in 1985 instead of the present mandated 27.5 mpg.
The real battle shaping up, however, is over the interim standards for the years between now and 1985. The standard is slated to rise from 19 mpg this model year to 20 mpg in 1980, and by an added 2 mpg a year, hitting 26 mpg in 1983. The industry, even if it can't get the final standard changed, wants to stretch out the increases so that they are not "front-end-loaded," as the auto spokesmen put it.
A new study by two departments of the Chase Manhattan Bank is sure to become an issue at the hearings.A massive effort running to hundreds of pages, the study alleges that major damage will be done to the U.S. economy if the present timetable for the standards is implemented.
Using a series of assumptions -- which administration economists say are highly questionable -- the Chase study concluded that insisting on 27.5 mpg instead of 26 mpg in 1985, and insisting on the front-end loading, could cost 1.3 million jobs by 1984.
It also would mean a cumulative loss in real output of a staggering $220 billion between 1981 and 1990, an annual $5 billion drop in the U.S. trade balance, and an increase in the annual federal budget deficit of $16 billion.
Claybrook termed the study, and its assumptions, "science fiction." She took issue with the assumption that the last 1.5 mpg in efficiency would have to come solely from consumers buying smaller cars. And, she said, it assumed that there could be no loss in acceleration capability. "That alone would buy us about one mile per gallon," she said.
Consumer advocate Ralph Nader, in a letter to the subcommittee, blasted the study and its dire conclusions. "On this scale," Nader wrote, "were Congress to have mandated 30 mpg by 1985, it might have destroyed the greatest economy in the Western world... This report would invite satire were its insidious commercial purposes not so detrimental to the nation's need for energy conservation..."
The industry argues that a smoother approach to the final standards, whatever it is, will allow it more time to develop and use new technological approaches to improving mileage. With more time, the cost of cars to consumers will e less, the industry says.
Industry witnesses, along with those from the United Auto Workers and the Center for Auto Safety, will appear tomorrow.