February 28, 2007 - MARKEY RIPS WHITE HOUSE WITNESS ON TAX LOOPHOLE

WASHINGTON, D.C. – Representative Edward J. Markey (D-MA), a senior member of the House Energy and Commerce Committee, today grilled the President’s Council of Economic advisors who testified that the Administration does not support taking action to close a dangerous and obsolete loophole in the gas-guzzler tax that incentivizes the purchase of the least efficient, most gas-guzzling vehicles on the market. After Rep. Markey asked what the Administration would recommend regarding this loophole, Chairman of the Council Ed Lazear answered, “No action."

At the same hearing, the Administrator of the National Highway Traffic Safety Administrator Nicole Nason conceded that despite the President’s proposal in the State of the Union Address to raise fuel economy by 4 percent per year in the next ten years, there was nothing in the Administration’s legislative proposal to ensure that any fuel economy increase would actually take place, let alone 4 percent a year.

Rep. Markey said, “We are in a war. Our national security is at stake. Troops are dying on the battlefield and the Administration’s top economic advisor supports ‘no action’ to fix this incentive that drives up oil imports? And the Administration refuses to commit to any fuel economy increase for cars. This is not just stupid – it is threatening our national security.”

The gas guzzler tax, passed in 1978 as a national security measure to reduce our dependence on foreign oil, is imposed on all passenger cars getting less than 22.5 miles per gallon.  But the definition of “cars” used in 1978 failed to anticipate that the auto manufacturers would build passenger vehicles so heavy (SUVs) that they would be characterized as “light trucks” instead of “cars.”  Today, approximately 97 percent of all passenger vehicles getting less than 22.5 mpg are exempt from the gas-guzzler tax.  The exception has swallowed the whole.

“All we need to do is muster the will to say that the gas guzzler tax should apply to all gas guzzlers. How hard is that?  Clearly, it is too hard for this Administration, which has demonstrated today that it would rather fight to maintain our dependence on oil than act to reduce it.  Mr. Lazear has summed up the bankruptcy of this Administration’s policy towards increasing efficiency very succinctly in just 2 words: ‘No action’,” Rep. Markey concluded.

Markey, the author of legislation to close the loophole, is also the leader in the House of the movement to raise fuel economy standards by 4 percent a year to 35 mpg by 2018.

For more information of Rep. Markey’s work on this issue, please go to http://markey.house.gov/index.php?option=com_content&task=view&id=2086&Itemid=141

FOR IMMEDIATE RELEASE
February 26, 2007

CONTACT: Vikrum Aiyer
David Moulton
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