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TESTIMONY OF SAM KAZMAN, ON BEHALF OF THE COMPETITIVE ENTERPRISE INSTITUTE AND CONSUMER ALERT BEFORE THE HOUSE COMMITTEE ON APPROPRIATIONS, SUBCOMMITTEE ON TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS, REGARDING FUNDING FOR THE NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION'S NEW-CAR FUEL ECONOMY PROGRAM
Until NHTSA changes its approach to this issue, the current appropriations freeze on CAFE standards should remain in force.
On behalf of the Competitive Enterprise Institute and Consumer Alert, I wish to thank this Subcommittee for this opportunity to testify. CEI is a nonprofit organization dedicated to advancing private solutions to regulatory issues, in areas ranging from environmental protection to health and safety. Consumer Alert is a nonprofit membership organization devoted to protecting and expanding consumer choice in the marketplace. Both CEI and Consumer Alert have been involved in the issue of CAFE for over a decade.
Based upon NHTSA's public record in administering CAFE, it is clear that this agency has simply refused to properly assess the human impact of that program, in terms of the relationship between CAFE-induced downsizing and passenger car crashworthiness. This view is confirmed by the rulings of two federal appellate courts. Until NHTSA remedies this course of conduct, Congress should continue to prohibit any expenditure of funds by the agency for raising the CAFE standards.
GIVEN NHTSA'S FAILURE TO ASSESS THE ADVERSE SAFETY EFFECTS
OF ITS CAFE PROGRAM, A CONTINUATION OF THE CONGRESSIONAL
FREEZE ON CAFE IS FULLY WARRANTED
One of the most solidly established relationships in traffic safety is the connection between vehicle size or mass and crashworthiness. Countless studies demonstrate that larger cars are generally safer than similarly equipped smaller cars in every crash mode, ranging from rollovers to single-car impacts to multiple car collisions.
NHTSA itself has recognized this relationship: "The increased risks for small car occupants who are in collisions with larger cars are easily recognized. But, it is also true that even in single vehicle crashes, there is increased risk of serious injury or death." NHTSA, Small Car Safety In The 1980's at 59 (1980). There are two basic reasons for this: smaller cars have less "survival space" for their occupants, and they have less physical structure to "absorb and manage crash energy and forces" in the event of a collision. Id. at 64.
CAFE forces carmakers to utilize a variety of strategies and technologies to increase their fuel economy. One of their major means of compliance has been through vehicle downsizing. In NHTSA's words, the "most obvious method for improving fuel economy is to make the passenger automobile lighter." NHTSA, Final Rule, 42 FR 33,534, 33,537/3 (i.e., column 3 on page 33,537) (1977).
Moreover, even after downsizing has taken place, CAFE forces carmakers to keep their cars smaller and lighter than they otherwise would be; that is, to avoid adding head room or trunk space to their models in response to consumer demand. Any steps to "upsize" vehicle models would mean that countermeasures would be required to offset the impact on fuel economy.
For this reason, there is an inherent conflict between vehicle safety and CAFE. This is a conflict which NHTSA recognized long ago. As the agency stated when it first began to consider CAFE standards: "With these smaller and lighter vehicles joining an increasing number of heavy trucks and older, heavier cars already on the road, the risk of death and serious injury will increase markedly." NHTSA, Traffic Safety Trends and Forecasts 2 (1981).
But when it came to publicly assessing CAFE's impact on safety, NHTSA faced a serious problem. As an agency whose primary mission is safety, NHTSA could not easily admit that its CAFE program increased traffic deaths. And so NHTSA chose, instead, to avoid the issue. In one CAFE rulemaking after another, the agency refused to admit that any of its individual fuel economy standards had any safety consequences whatsoever. It took this course not only when it raised the standards, but even when it lowered them. For example, in its model year 1986-89 CAFE rollback, NHTSA extensively described the various benefits of lower CAFE standards on the economy and on consumer choice. But when it came to safety, the agency refused to admit that there was any benefit whatsoever:
"While the agency recognizes the relationship between safety and vehicle size and weight, in a crash, it nonetheless concludes that CAFE standards in the range of 26.0 mpg to 27.5 mpg need not have a significant effect on safety." 51 FR 35,612/3 (1986).
Independent analysts, on the other hand, took a far different view, and some were able to actually calculate the magnitude of CAFE's lethal effects. A 1989 Harvard-Brookings study estimated that the 27.5 mpg CAFE standard was responsible for a 500 pound drop in the average weight of a new car, and that this translated into a 14-27 percent increase in occupant fatalities--2,200 to 3,900 additional traffic deaths per year. R.W. Crandall & J.D. Graham, The Effect of Fuel Economy Standards on Automobile Safety, 32 J. Law & Econ. 97, 109-16 (1989).
NHTSA's position, that CAFE had no safety impact, required it to engage in some exceptionally tortured reasoning. NHTSA denied that CAFE had any effect on car size, even though its own annual reports to Congress described how CAFE was forcing carmakers to use lighter materials. NHTSA argued that its crash tests demonstrated that both large and small cars could perform equally well, even though its crash test reports stated the opposite in boldfaced warning:
"Large cars usually offer more protection in a crash than small cars. These test results are only useful for comparing the performance of cars in the same size class." NHTSA, Testing How Well New Cars Perform In Crashes (undated; approx. 1985).
In short, NHTSA refused to allow facts to obstruct its campaign to whitewash CAFE.
TWO FEDERAL COURTS HAVE FOUND NHTSA’S TREATMENTOF THE CAFE SAFETY ISSUE TO BE INADEQUATE
CEI and Consumer Alert finally sued NHTSA, arguing that the agency had failed to consider the safety issue in promulgating its CAFE standards. In 1992, a federal appeals court agreed and overturned the agency's claims. CEI and Consumer Alert v. NHTSA, 956 F.2d 321 (D.C. Cir. 1992) (Attachment A hereto). The court ruled that NHTSA's failure to assess CAFE's lethal effects was an "attempt to paper over the need to make a call. We cannot defer to mere decisional evasion." 956 F.2d at 323. Using exceptionally harsh language, the court found that NHTSA had
"fudged the analysis ... and, with the help of statistical legerdemain, made conclusory assertions that its decision had no safety cost at all. ... The people petitioners represent, consumers who do not want to be priced out of the market for larger, safer cars, deserve better from their government." Id. at 324.
As described above, one of NHTSA's defenses was that downsizing was not an important means of CAFE compliance and that, even if consumers could not find affordable domestic large cars, they could always turn to foreign cars. The court rejected this argument as a "lame claim"; given the high prices of large foreign cars, it found NHTSA's argument about their availability to be "in the spirit of Marie Antoinette's suggestion to 'let them eat cake'." Id. at 325 & n.1. It concluded with these words:
“When the government regulates in a way that prices many of its citizens out of access to large-car safety, it owes them reasonable candor. If it provides that, the affected citizens at least know that the government has faced up to the meaning of its choice. The requirement of reasoned decisionmaking ensures this result and prevents officials from cowering behind bureaucratic mumbo-jumbo." Id. at 327.
Because NHTSA had illegally refused to confront the CAFE-safety issue, its decision was remanded. For the first time in CAFE's history, a fuel economy standard had failed to pass judicial review.
The court's ruling, however, did not lead NHTSA to alter its basic approach of exonerating CAFE. After more than a year of reconsideration, NHTSA finally developed a new rationale for its claim that CAFE has no safety effects whatsoever. Among its new arguments for the notion that CAFE has no downsizing effect was this unbelievable line of reasoning: "the size and weight of many other products, ranging from SLR cameras to computers, was reduced during the same period ...." 58 FR 6946/1 (1993).
NHTSA was thus claiming, in total seriousness, that size trends for objects that consumers carry around their necks or place on their desks were somehow indicative of what might happen to car size in the absence of CAFE. At the same time, of course, such non-portable objects as new homes and television sets were increasing in size; given NHTSA's desperation to justify CAFE, however, this was irrelevant.
CEI and Consumer Alert sued NHTSA once again. This time we did not succeed; a new panel of judges upheld NHTSA's decision, noting the high degree of deference to which agency rulemaking is entitled. CEI and Consumer Alert v. NHTSA, 45 F.3d 481 (D.C. Cir. 1995). Nonetheless, even this panel pointed out that the agency's approach to the CAFE size-safety issue was questionable; in its words, "NHTSA's failure to adequately respond to the Crandall and Graham study is troubling ...." Id. at 486.
In the years since that decision, new evidence has continued to support the size-safety relationship. See, for example, NHTSA, The Effect of Decreases in Vehicle Weight on Injury Crash Rates (Jan. 1977). NHTSA, however, has not changed its approach to CAFE in the slightest. Yet CAFE’s lethal toll continues to mount yearly; by our estimates, in 1996 there were an additional 2700 to 4700 traffic deaths due to CAFE’s downsizing effects. J.C. DeFalco, CAFE’s “Smashing Success”—The Deadly Effects of Auto Fuel Economy Standards, Current and Proposed (CEI, 1997) (Attachment B). If CAFE had been set at the 40 mpg level advocated by some, that death toll would been even higher—3900 to 5800 deaths. Id.
Moreover, the public’s current lack of knowledge of these lethal effects is the key to the modest public support that CAFE currently enjoys. A recent CEI poll demonstrates that, once the public is informed of CAFE’s actual impact on safety, support for CAFE plummets from its current modest level of 51 percent down to a mere 19 percent. CEI, National Environmental Survey, Questions 34-37 (Jan. 1999) (Attachment C).
The public does not know the facts about CAFE. One of the prime reasons for that lack of knowledge is NHTSA’s decades-long campaign, described above, to avoid any serious assessment of this issue. Until NTSA changes its approach and confronts this issue, the current appropriations freeze should be continued.
DISCLOSURE OF FEDERAL GRANTS AND CONTRACTS
General Counsel, Sam Kazman
Competitive Enterprise Institute
February 5, 1999