Politically speaking, advanced vehicle programs proposed by the Obama administration have hit some major potholes. But that hasn't stopped the President from trying to accelerate federal spending on electric and even natural-gas-powered vehicles. A good example of that is the $1 billion National Community Deployment Challenge Obama announced in March. The idea there is to funnel Department of Energy funds to 10 to 15 model communities to create local incentives to support deployment of advanced vehicles at critical mass. This proposal would be ‘fuel neutral,’ allowing communities to determine if electrification, natural gas or other alternative fuels would be the best fit.
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Charlotte Baker, press secretary at the House Energy & Commerce Committee, says her committee would probably have to authorize the new program. If an authorization bill passed the full House and Senate, then the Appropriations Committees in both houses would have to approve funding in the FY2013 budget, which begins Oct. 1, 2012. "We are still looking into the program, but we have concerns about creating a new mandatory spending program at a time when we are trying to cut spending," explains Baker. "It appears the program would need to be authorized, but the president has given Congress no direction on how to pay for it."
Any direction the Obama administration supplies will lead to the Department of Energy (DOE), which already runs some advanced vehicle grant and loan programs. There has been, of course, a lot of negative publicity around one of those programs: the $25 billion advanced technology vehicles manufacturing loan program. This was established by Congress in December 2007 as part of legislation which mandated new Corporate Average Fuel Efficiency (CAFE) standards by model year 2020. The Government Accountability Office (GAO), the non-partisan federal government watchdog, just dropped more uncomplimentary news on the program on April 18 when it issued a report about a number of DOE alternative energy programs. About the vehicle program, the GAO said: "...at the time of GAO’s review, DOE could not be assured that projects would be delivered as agreed."
In a letter to Energy Secretary Seven Chu in March, Rep. Andy Harris (R-MD), chairman of the House Transportation Energy and Environment subcommittee, wrote: “The Obama Administration has spent billions of taxpayer dollars subsidizing electric vehicles. As with so much of the rest of the President’s green energy agenda, we have little to show for it beyond story after story of waste, mismanagement and poor results. We’re drowning in debt and borrowing nearly 40 cents of every dollar we spend. The Administration owes it to the American people to explain and justify the President’s calls to spend even more in this area and expand subsidies for vehicles only affordable to the wealthiest Americans.”
Actually, Obama's $1 billion deployment initiative resembles programs proposed in the past by both GOP and Democratic legislators; and the Obama program is likely to have the same fate: difficulty progressing legislatively. Obama himself in his March announcement about the $1 billion initiative likened it to a program, which will be set up by Sens. Jeff Merkley (D-OR) and Lamar Alexander (R-TN). Their Promoting Electric Vehicles Act passed the Senate Energy Committee with GOP and Democratic support by a vote of 19-4 in 2010, but died on the Senate floor. The committee approved that bill in a package that included the Advanced Vehicle Technology Act, which also had some vehicle deployment provisions. Regarding that second bill, the Motor and Equipment Manufacturers Association on its website says: "The bill is critical for all parts suppliers, passenger car and heavy duty, original equipment and aftermarket."
But what might be good for the aftermarket may be no more than an afterthought for Congress.
