WASHINGTON – Two Senators proposed legislation Monday that would give $1.3 billion in annual rebates to consumers who buy fuel-efficient cars that would help decrease dependence on foreign oil.
Sens. Ron Wyden,D-Ore.,and Bob Bennett,R-Utah,call their bill OILSAVE,which stands for the Oil Independence,Limiting Subsidies and Accelerating Vehicle Efficiency Act.
To fund the $6.5 billion program that would last from 2007 to 2011,the bill would limit subsidies given to large oil companies such as Exxon Mobil,Chevron and Shell,resulting in a $6.8 billion surplus,according to an estimate by the Joint Committee on Taxation.
Standing in front of Bennett's silver Ford hybrid sport utility vehicle on Capitol Hill,Wyden and Bennett said OILSAVE would create incentives for all fuel-efficient cars – not just ones specified under last year's Energy Policy Act.
“The more fuel efficient the vehicle,the greater benefit the consumer receives,” Wyden said.
To qualify,cars would have to average at least 34.5 miles per gallon,and SUVs and trucks would have to average at least 27.5 mpg. Based on the vehicle's fuel efficiency,buyers would receive $630 to $1,860 in tax credits.
Under the Energy Policy Act now in effect,19 hybrid and alternative fuel cars bought after Jan. 1 qualify for tax credits – from $250 for a Chevrolet Silverado hybrid to more than $2,600 for a Ford Escape hybrid. All the vehicles eligible for these tax credits can be found at http://www.fueleconomy.gov/
Once 60,000 cars of a certain make are sold,the rebates diminish,providing smaller tax credits until none is left. Toyota is the only company in the “phase out” process. OILSAVE would give tax credits to all buyers of new cars that meet mileage standards.
Wyden and Bennett said their bill would give consumers more choice when they shop for new environmentally friendly cars,instead of forcing them to buy pre-approved vehicles.
Consumers could also get their cash back at dealerships and let the dealers claim the tax credits.
Bennett said his and Wyden's bill is a free-market approach to getting more Americans to go green. Bennett said he was the first member of Congress to own a hybrid car,a Honda Insight he bought more than four years ago.
“If a customer makes the decision that he wants to pay the gas-guzzler tax,he wants to buy a Hummer No. 1 and drive around in it,there is no prevention laid down by government to say to General Motors,‘You can't produce that car,'” he said.
Six billion gallons of gas could be saved if all U.S. vehicles improved by 1 mpg,according to the Environmental Protection Agency.
Improving all cars by 5 mpg would save 25 billion gallons annually – or 1.6 million barrels of oil per day,equal to the amount imported from Saudi Arabia.
The bill comes after a record-setting year for fuel costs – the national average for regular gasoline peaked at $2.85 a gallon in August. Monday's average was $2.49,28 cents lower than last September,according to the Energy Information Administration.
Tancred Lidderdale,an economist for the Energy Information Administration,said gas prices next summer will be higher than average,”but not as bad as last year.” He said gas should average $2.76 a gallon next summer.
With Congress set to adjourn in about two weeks,neither senator expected the bill to get a hearing this year. But they said they would introduce it again next year.