By on May 7, 2010

Due to scheduling conflicts with a certain island nation’s democratic rituals, CSPAN didn’t have a channel to spare for today’s auto safety legislation hearing before the the House Energy and Commerce subcommittee. Which means your faithful blogger is at the mercy of the mainstream media’s digestive process in this matter. Regardless, it seems clear by now that the legislation has driven the industry back to the Republican bosom, after a period of post-bailout estrangement. These newly-re-allied forces collectively raised concerns about a number of key proposals presented by Rep Henry Waxman’s Motor Vehicle Safety Act of 2010, including the un-capping NHTSA fines, privacy issues relating to “black box” event data recorders, new car sale vehicle fees, pedal clearance standards, and increased regulation of an industry with state-owned competitors.

It might, however, be going too far to describe automakers and Republicans as a truly united front. The automakers, speaking through Alliance of Automobile Manufacturers president Dave McCurdy and Alliance of International Automobile Manufacturers president Mike Stanton, focused their opposition on the proposed un-capping of NHTSA’s power to fine automakers for delaying recalls. In fact, McCurdy refused to fight most of the proposed measures, voicing his organization’s support for mandatory brake-override systems, keyless ignition standards, and event data recorder standards (if not the exact measure proposed in the MVSA) in his opening statement. Even an increase in NHTSA fines was found acceptable to the AAM as long as it helped preserve caps on NHTSA fines. Toyota could have faced $13.8b in fines under an uncapped version of the current fine structure, and would have faced $69b in fines under the proposed legislation.

But that wasn’t the only issue McCurdy took a stand on. Towards the end of his statement, he really gets going on the topic of giving NHTSA the power to stop vehicle sales:

Regarding granting NHTSA imminent hazard authority, the proposed provisions are so lacking in standards and the opportunity to be heard before a neutral decision-maker as to violate the Due Process Clause of the U.S. Constitution.

McCurdy’s statement closes by blasting the proposed $250m maximum fine for auto executives as unfair, arguing that it was over 50 times harsher than the maximum penalty for financial crimes under Sarbanes-Oxley. “I thought that must be a typo,” said McCurdy. Of course he mayjust have been cranky about having to remind congress that:

A proposed transmission configuration standard is not necessary because such a standard already exists.

The Republicans, meanwhile appear to have been somewhat less strategic and more polemical than the industry. McCurdy’s statement conspicuously stayed away from the new vehicle sale fee issue, but both he and Stanton testified against increasing NHTSA’s budget without a clear mission. Republicans were less equivocal, laying into the provision along anti-tax lines. A sampling comes courtesy of Rep Joe Barton and the Detroit Free Press:

This bill imposes more taxes, gives big government new unfettered authorities, and provides potentially crippling penalties on industry while providing questionable safety benefits

You get the picture. The Republicans also echoed McCurdy’s concerns about event data recorder privacy, and imminent hazard authority, with John Dingell (D-M) crossing the aisle to join arms on the latter issue according to the WSJ [sub].

Under this hail of attacks along all-too familiar expansion-of-government lines, the Obama administration shrank away from a wholehearted endorsement of the proposed legislation. NHTSA Administrator David Strickland excused himself from an exhaustive opinion, pleading that

Time has not permitted full review of all of the draft legislation’s provisions throughout the Executive Branch

As a result, his testimony appears to have been less than entirely illuminating. He argued in favor of imminent hazard, on the grounds that other consumer protection agencies are granted the same power. Though anxious to not associate the White House with any of the proposed legislation’s more controversial measures, Strickland did concede that:

NHTSA is a strong Agency; this bill’s authorities would make us stronger. If enacted, these measures would significantly increase the agency’s leverage in dealing with manufacturers

Full prepared testimony from today’s hearing can be found at the House Committee On Energy And Commerce.

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24 Comments on “Industry, Republicans Attack Proposed Auto Safety Legislation, NHTSA Plays It Cool...”


  • avatar
    newcarscostalot

    ‘provides potentially crippling penalties on industry’

    Republicans have traditionally been more sympathetic to big business.

    • 0 avatar
      mythicalprogrammer

      “Republicans have traditionally been more sympathetic to big business.”

      That’s a HUGE understatement. Not the Democrats haven’t done so themselves but not to the extent of Republicans.

    • 0 avatar

      “Republicans have traditionally been more sympathetic to big business.”

      That’s a HUGE understatement. Not the Democrats haven’t done so themselves but not to the extent of Republicans.

      That’s simply not accurate. Republicans and conservatives tend to favor free markets, which can be seen as a pro-business stance. Most big corporations, though, are not politically ideological (though their owners may be, see below). Big companies prefer protected monopolies to free markets. That’s one reason why after lead tainted toys made for Mattel in China led to the Consumer Product Safety Improvement Act, the CPSIA lets big companies do their own testing while forcing smaller manufacturers to use third party tests, giving companies like Mattel a huge advantage, because small companies may not be even able to afford the testing, which they don’t really need because unlike the big companies the small firms know what’s going into their products.

      Little of this can be done without the participation of politicians and bureaucrats and more often than not, those pols tilt left, not right.

      The Democratic Party has many more large donors than the Republican Party. Warren Buffet supported Obama. Peter Lewis, of Progressive Insurance, has given millions to Democrats. So has billionaire Steve Bing. The Republican Party gets most of its money from smaller contributions, $200-$500, mostly from small and medium sized business owners, not from the super rich.

      The single biggest recipient of British Petroleum political contributions in the past 20 years is Barack Obama. Over 80% of political contributions from Wall Street and the financial industry flow to Democrats.

      When it comes to crony capitalism, the Dems take the lead.

    • 0 avatar
      jimble

      @Ronnie Schreiber: You are correct that Obama is the single largest recipient of BP contributions — like most big corporations, BP likes to bet on winners. But historically BP has given much more money to Republicans than to Democrats, with especially large sums of money going to congressmen in oil-producing states like Louisiana and Alaska.

  • avatar
    Robert.Walter

    On McCurdy and Strickland:

    McCurdy’s argument is (like all industry spokesmen’s arguments are paid to be, one that is self-serving) on one hand, obviously he can’t make a statement in the extreme like “an uncapped penalty could bankrupt a manufacturer” (because he would use another channel/person/forum to make that statement), so he positions himself against the topic entirely because he knows that if the satus quo changes, two things will happen: 1) enforcement will toughen and fines will increase, and 2) the OEM’s will be more accountable and will therefore have to be more circumspect (further loss of autonomy.)

    Strickland did concede that: “NHTSA is a strong Agency; this bill’s authorities would make us stronger. If enacted, these measures would significantly increase the agency’s leverage in dealing with manufacturers.”‘

    This guy makes me miss LaHood … why doesn’t he just say he is mispositioned and so he wants and needs the elements of this bill.

    Let’s deconstruct his statement:
    - “NHTSA is stong”: Well, if it were ‘strong enough’ there would not have been any need for flying to Japan to convince Toyota to do the right thing, and there would, similarly, be no need in future to have any ‘additional lvereage.:
    - “Bill would make us stronger”: No statement that agency is strong enough, thus ‘not strong enough’ is implied;
    - “would significantly increase agency leverage”: If there was for every case then there would be no need for augmentation of authority. It is the big-tough-expensive-image-damaging-ones that are where the Agency is under equipped, be it in the area of statutory leverage, adequate personnel, and a bias toward ‘working things out’ with OEM’s.

    So in summary to the McCurdy and Strickland positions, statements and situations, I say this is precicely why the Agency needs a bigger stick. The devil will be in the details, but generally speaking, I see this bill as more or less sufficient, and demonstrated by events to be necessary.

    • 0 avatar

      So in summary to the McCurdy and Strickland positions, statements and situations, I say this is precicely why the Agency needs a bigger stick

      No government agencies in this administration need a bigger stick. The government is already too damn intrusive. Bureaucrats never admit failure. It’s never their fault and nobody examines the underlying premises. As far as the kleptocrats are concerned, bureaucracies only fail because they haven’t been given enough power and funding.

    • 0 avatar
      newcarscostalot

      But what would be your solution? Industry wont regulate itself, as we have seen with the financial crisis and Republicans don’t want to have regulations, or minimal regulations, with low enforcement.

  • avatar
    segar925

    “Republicans have traditionally been more sympathetic to big business.” A more accurate assessment (and this is a great example)would be “Democrats think more government regulation is the answer to every problem.” This regulatory B.S. and “vehicle sales fees” will just be added to the price of every new car.

    • 0 avatar
      psarhjinian

      Republicans, in practice though not in theory, are equally regulation-happy, though in a different direction: they’ll curtail people with greater eagerness than companies. Or, put it this way, Democrats will fine you into bankruptcy, Republicans will throw you in prison.

      Both groups are two sides of the globalist coin. This is why American politics could really use an additional two parties: both left- and right-wingers who don’t play on fear.

    • 0 avatar
      newcarscostalot

      Of course. However, to relax, remove or not implement regulations in regards to industry is a bad idea. Republicans would have minimal regulations and minimal enforcement, which is exactly what allowed the financial crisis to occur. I don’t think that the Democrats should of taken over GM, as government does not do a good job when it comes to running a business. Strong regulations with vigorous and consistent enforcement is the key, in my opinion.

    • 0 avatar

      Republicans would have minimal regulations and minimal enforcement, which is exactly what allowed the financial crisis to occur.

      Are their any Democratic talking points that you wont’ repeat mindlessly?

      Of course, as far as you’re concerned, the way that Democrats pushed Fannie & Freddy into the liars loan market, allowing those agencies to package and sell worthless derivatives, has nothing to do with the financial crisis.

      In your opinion, just what can’t Congress and the Administration regulate? Are there any limits to the power of the Federal government? If so, please indicate the constitutional basis for those limits.

    • 0 avatar
      newcarscostalot

      What’s particularly sad is that the foot soldiers of both sides of the political spectrum are so busy haranguing their opposite numbers for the sins of globalists that they don’t realize they have more in common with those opposite numbers than they do with the more power-hungry in their own political sphere.

      I agree with the above statement, but I am not sure how to put into practice with my own outlook/ideals/opinion. I don’t (intentionally) repeat democratic talking points. I also don’t blindly believe Republican talking points either, simply because I tend to be more liberal in my POV. I also have heard some comments that Republicans have made in regards to recent issues, and I don’t agree with the Republican ideas.

      For example, Republican senators wanted to have caps on insurance payouts when a doctor is sued, because the Republicans stated this would lower insurance premiums if caps were put into place. This is incorrect, because possible payouts for a hypothetical lawsuit is an abstract. Insurance companies exist to make a profit. If this law were enacted, why would an insurance company suddenly freeze or lower prices? This would not make good business sense and the shareholders would not allow it. In addition, we are talking about two areas of insurance. If a Doctor A gets sued and his malpractice premiums increase, he will have to raise his prices, which will cost patient A’s insurance to spend more, which will cause premiums to rise. Finally, if a 250k cap were imposed, that’s still 250k. No insurance company in their right mind would lower prices. My point is this: Republicans have made many arguments that sound good on the surface, but when you dig, their arguments don’t hold up. Democrats are not trustworthy either, but they are the lesser of two evils, in my opinion.

    • 0 avatar
      psarhjinian

      @newcarscostalot

      Think about your scenario “outside the box”: in ideal circumstances if you’re socialist, a person badly wounded by the medical system would be given carte-blanche insurance, and the doctor would be barred from practicing medicine. This is how an actual socialist would differ from an American Democrat

      I’m not sure what a liberatian would do, in ideal terms, because I’m not well set-up to think like one. I don’t think playing footsie with insurance companies or the legal system would be their choices, which is how they’d differ from a Republican.

      Arguing over insurance is very much a globalist methodology. Insurance ought not to come into it at all: that injured person would be compensated and allowed to live life comfortably without concern that their injury will hold them back.

      There’s nothing wrong, per se, with globalist politics: it’s a healthy counterpoint to prevent a slide into stagnation and/or populism. The problem is that, since the Right went globalist in the 1980s with Reagan and Thatcher and the Left with Blair in the 1990s, there’s been precious little balance in politics and the needs of people have been put through the meat-grinder.

      I think, though, that it could change if matters in Europe and America do not improve. Globalists have been traditionally very good at shaping populism to their own ends, but it can’t go on for much longer.

    • 0 avatar
      newcarscostalot

      What might happen when -Globalists have been traditionally very good at shaping populism to their own ends, but it can’t go on for much longer.- this time passes? Meaning, do Globalists ideas lose power? I have not considered things in the way you have. Very interesting, and disturbing! It seems that you are saying (oversimplification on my part here) that the Globalists are manipulating things to the detriment of society, at least in the USA.

  • avatar
    jpcavanaugh

    Here is the pattern. Something bad happens. The government panicks and jumps in to pass new laws to be sure that it never happens again. Only it will, just in a different way.

    Yessirree – if only the government would have had the power to fine Toyota billions of dollars, none of this would have happened. Right. As it is, the debacle has surely cost Toyota billions of dollars in recalls, lost sales and lawsuit exposure. Or maybe the government could have forced Toyota to stop selling cars. As I understood, it DID make Toyota stop selling cars for awhile. And since we know that the government never panicks or does something stupid or political, what’s the harm in allowing them more authority to stop sales?

    Would this whole thing come up if it were a GM or Chrysler car implicated in these sudden accelleration cases? Fines and stop sale orders are fine until it puts companies out of business, workers out of jobs and destroys dealers and the value of individual’s cars.

    I am not advocating going back to 1960. Cars are the safest they have ever been, in no small part to government safety requirements. But we have reached the point of diminishing returns. It is impossible to legislate perfection. All of this is going to cost us. And people will still die in accidents. This is government hubris that is not going to solve a problem.

    • 0 avatar
      windswords

      JP,

      Good points. I would point out that it is government hubris that they think thru legislation that they will ALWAYS solve a problem, no matter what it is, but often they make the problem worse, or create an entirely new one (that they will then rush in and try to solve, after acting shocked that such a problem would be occurring in the first place).

      There are however some good ideas mixed in here, such as the EDR and keyless ignition standards.

  • avatar
    mythicalprogrammer

    Technologies is always advancing. Cars will be advancing and such there will be more opportunity for abuses.

    So with that said, I believe restrictions and regulations should be there if such technologies are advancing. Hedge funds and backdoor betting pools are pretty new with no regulations look at what it gotten us into. Before the great depression with had no FDIC insurance and didn’t require the bank to hold a minimum pool of money just in case they go bankrupt.

    To leave it to this mythical altruism of corporations is kinda dumb.

    • 0 avatar

      To leave it to this mythical altruism of corporations is kinda dumb.

      To leave it to this mythical altruism of Democrats & bureaucrats is even dumber.

    • 0 avatar
      psarhjinian

      To leave it to this mythical altruism of Democrats & bureaucrats is even dumber.

      Not true. Government is, at least notionally, responsible to the electorate. Corporations are responsible to… their shareholders? Their directorate? Profits?

      Neither group is really ideal, but I will take the entity I have some power over versus the entities who are effectively unconstrained by most laws that bind me and have the financial wherewithal to fight what laws bind them. Of course, that’s just my opinion, given what I’ve seen of corporate versus government abuses of power.

      That said…

      What’s particularly sad is that the foot soldiers of both sides of the political spectrum are so busy haranguing their opposite numbers for the sins of globalists that they don’t realize they have more in common with those opposite numbers than they do with the more power-hungry in their own political sphere.

    • 0 avatar
      newcarscostalot

      Ronnie Schreiber:

      What is your solution? I am not sure of a solution, but whatever it may be it is bound to be complex, because the issues are complex. Do bureaucrats butt out and leave it to corporations? That might cause issues, as we have seen what corporations do when left to their own devices. We have also seen what government does when left to their own devices. I am asking, because in order to keep America great we need solutions, not tit for tat bickering. This is what I aim for, even though I allow myself to get polarized over individual issues.

  • avatar
    segar925

    “Republicans would have minimal regulations and minimal enforcement, which is exactly what allowed the financial crisis to occur” and the community reivestment act (created by Democrats) that forced banks to finance mortgages for otherwise unqualified buyers had absolutely nothing to do with our current finacial crisis. What kind of Democrat Crack are you smoking?

    • 0 avatar
      newcarscostalot

      The original reason that the CRA was enacted was to give more credit access to moderate and low income neighborhoods. The majority of sub-prime loans came from banks that were not covered under the CRA. To blame the whole issue (which is complex) on the CRA is ridiculous. You are ignoring all of these causes:

      Boom and bust in the housing market
      Speculation
      High-risk mortgage loans and lending/borrowing practices
      Securitization practices
      Inaccurate credit ratings
      Government policies
      Policies of central banks
      Financial institution debt levels and incentives
      Credit default swaps
      US Balance of Payments
      Boom and collapse of the shadow banking system

  • avatar
    segar925

    “newcarscostalot” By your own admission:
    1. Boom and bust in the housing market(caused in large part by CRA)
    2. Speculation(in the housing market, largely due to effects of CRA)
    3. High-risk mortgage loans and lending/borrowing practices(CRA
    loans to unqualified buyers mandated by government policy)
    4. Securitization practices
    5. Inaccurate credit ratings
    6. Government policies (CRA intervention in the private market)
    Bottom line here is the government intervention screws up virtually everything it touches, just like corporate bail-outs that only worsen and prolong the eventual outcome.

  • avatar
    newcarscostalot

    Lack of intervention allowing corporations to police themselves also leads to serious negative consequences, which is what happened during the years President Bush and the Republicans controlled the government. This is fact, not something I or anyone else makes up. Why folks that lean to the right and pretend to be conservative (just like the Republican politicians that do the same thing) choose to dispute this is beyond me.

    I for one Don’t agree with bailouts, because they do nothing except prolong the cycle. For example, Chrysler got bailed out around 30 years ago. When this happens, Executives/shareholders who are never held accountable just shrug and say ‘Oh well, if we need money the government will give it to us.’ I for one don’t like any politicians, but If I have to choose between Republicans or Democrats, I usually choose Democrats as the slightly lesser of two evils. Then I drink a beer, because really, you need a beer to lessen the effects of their crazy policies.


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