Statements on Introduced Bills and Joint Resolutions

Floor Speech

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - June 14, 2007)

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By Mr. WYDEN (for himself and Mr. BENNETT):

S. 1619. A bill to amend the Internal Revenue Code of 1986 to provide a credit for fuel-efficient motor vehicles, and for other purposes; to the Committee on Finance.

Mr. WYDEN. Mr. President, today Senator BENNETT and I are reintroducing legislation to provide a significant financial incentive for automakers to produce, and for their customers to buy, more fuel efficient cars and light trucks in the form of consumer tax credits. Reducing our Nation's dependence on oil should not be a partisan issue and Senator BENNETT and I have worked together to come up with a plan that will encourage consumers to buy more energy efficient vehicles even if those vehicles employ technologies, such as electric hybrid drive trains or clean diesels, that cost more to produce.

Under our bipartisan, market-oriented bill, consumers who buy vehicles that are at least 25 percent more fuel efficient than the current corporate fuel economy standards, called CAFE, would get a rebate of at least $630 and as much as $1,860 for the most fuel-efficient cars. We have separate standards for cars and trucks so consumers can choose the type of vehicle they want and still get the credit as long as they choose a fuel-efficient model. Similarly, our bill is technology neutral. We don't provide a credit based on the kind of engine or drive train that a car or truck has. We provide a credit based on the level of fuel economy the vehicle achieves. So, manufacturers are free to pursue whichever efficiency technology they want and consumers have a greater choice of vehicles to purchase.

In the past, the automobile industry has said that increasing fuel economy standards is hard to achieve because car buyers place little value on fuel economy, especially if that fuel efficiency comes with added cost. They also argue that initial purchaser of a new car or truck will not keep that car or truck long enough to recognize the life-cycle fuel savings of a more efficient vehicle. The new program created by our bill directly addresses these concerns by providing tax credits to consumers for purchasing fuel-efficient vehicles.

Providing these credits to purchasers of fuel efficient vehicles will focus consumer attention on fuel efficiency at the time of purchase. For vehicles that qualify, the rebate amount would be printed on the window sticker on new vehicles, so consumers would know exactly how much they would receive at the time they buy a new vehicle.

The consumer would claim that rebate as a tax credit on his or her tax return. Alternatively, the rebate could be transferred to auto dealers, allowing dealers to provide the rebates to consumers as ``cash back'' at the time of purchase.

This legislation builds on the incentives that were provided in the 2005 energy bill specifically for hybrid gasoline/electric, lean-burn and fuel-cell powered cars. We believe the approach that we are advocating will be simpler and fairer. Unlike the 2005 credits, we don't pick specific technologies. Unlike the 2005 credits, we don't limit the amount of the credits to a specific number of vehicles or manufacturer. This approach does not pick winners and losers among competitive technology or companies. It takes a technology-neutral approach that allows any vehicle that has superior fuel efficiency to qualify for a tax credit, whether it uses hybrid or any other technology.

Finally, legislation already passed by the Senate Commerce Committee calls for the U.S. Department of Transportation to begin to increase the fuel efficiency standards of cars beginning in model year 2011. Our tax credit program, which will cover model years 2009, 2010 and 2011, will help bridge the gap between where we are now and implementation of the new fuel economy standards by encouraging consumers to buy those more fuel efficient vehicles earlier while helping manufacturers gear up to produce them.

I urge colleagues to help jumpstart our Nation on the road to oil independence and chart a new direction for our Nation's energy policy by supporting the OILSAVE Act.

I ask unanimous consent that the text of the bill be printed in the RECORD.

There being no ojection, the text of the bill was ordered to be printed in the Record, as follows:

S. 1619

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