Biden's DOT pushes tighter fuel efficiency rules for SUVs

The Transportation Department on Friday floated a fuel economy rule that would require automakers to more aggressively increase the efficiency of SUVs and pickup trucks compared to passenger vehicles through 2032.

Sedans have already improved at a rapid clip, but SUVs and pickup trucks — which have become increasingly popular with American drivers — have “more room to improve,” the proposal said. Doing so could bring the fleetwide average in 2032 to around 46 miles per gallon in real-world terms.

“Better vehicle fuel efficiency means more money in Americans’ pockets and stronger energy security for the entire nation,” Transportation Secretary Pete Buttigieg said in a statement.

Republicans swiftly blasted the proposal.

It is another salvo in the "war on affordable gas-powered cars and trucks," said Sen. Ted Cruz (R-Texas). "This de facto EV mandate will dramatically raise car prices, weaken energy security, and is likely contrary to the law."

The fuel economy proposal aligns with EPA’s April tailpipe emissions proposal, Reg. 2060-AV49, that by 2032 would effectively require 67 percent of new vehicles to be zero-emissions. That’s an order of magnitude more than current electric vehicle sales levels, though many automakers plan to significantly expand their electric vehicle offerings.

But unlike EPA, the National Highway Traffic Safety Administration is barred by law from taking electric vehicles into account when setting its standards — though automakers are free to comply by selling more of them.

NHTSA’s proposal, Reg. 2127-AM55, would require automakers improve their fuel efficiency by 2 percent annually starting with model year 2027 for passenger cars and 4 percent for light trucks, a category that includes many sport utility vehicles.

“The agency believes that there is more room to improve the fuel economy of light trucks, in a cost-effective way, and that the benefits of requiring more improvement from light trucks will be significant given their high usage and the fact that they make up an ever-larger percentage of the overall fleet,” the proposal said.

It continued: “Passenger cars, on the other hand, have been improving at a rapid rate for many years in succession, and the available improvements for that fleet are fewer, particularly given the statutory constraints that prevent NHTSA from considering the fuel economy of battery electric vehicles (BEVs) in determining maximum feasible [Corporate Average Fuel Economy] standards.”

With those requirements ramping up annually, the fleetwide average fuel economy could reach 58 miles per gallon in 2032, though that figure could shift depending on sales ratios of more efficient passenger cars versus gas-guzzling SUVs. That figure is based on compliance testing; the “real-world” average tends to be around 20 percent lower, in this case around 46 mpg.

Because NHTSA by law can only set fuel economy standards for five model years at a time, the 2032 standards will not be binding until a future rulemaking confirms or alters them. But the agency said issuing it now gives automakers more predictability.

The rule also would require 10 percent annual improvements between model years 2030 and 2035 for commercial pickup trucks and work vans.

NHTSA’s proposal also includes one less stringent alternative option and two that are more stringent. But NHTSA said its analysis found those more stringent options may be unachievable for automakers and that they likely would increase costs on consumers without bringing offsetting fuel savings.

The proposed standards would reduce gasoline demand by an estimated 88 billion gallons through 2050 for light-duty vehicles and 2.6 billion gallons over that period for heavy-duty pickup trucks and vans. Overall, that would save 907 million metric tons of carbon dioxide emissions, NHTSA estimated — the equivalent annual climate emissions of 202 million cars or 243 coal-fired power plants, according to EPA’s greenhouse gas calculator.

The rule would mean higher cost for new vehicles upfront — $932 over the baseline — but lifetime fuel savings for light-duty vehicles are projected to total around $1,043, roughly a $100 net benefit, according to the rule.

EPA calculated total net benefits of $19 billion at a 3 percent discount rate.

Alliance for Automotive Innovation President and CEO John Bozzella said in a statement that his group, which represents the major automakers, is reviewing the proposal. He noted the rule aligns with EPA’s own recent tailpipe emissions proposal — which the industry has argued is too aggressive and ignores alternatives to battery electric vehicles, such as plug-in hybrids.

Bozzella also called for EPA and NHTSA to maintain aligned rules, or even better, to return to a harmonized rulemaking process.

“The best policy would be a return to a single national standard to reduce carbon in transportation — one vehicle fleet and one national standard,” he said.

Many major environmental and public health groups applauded the proposal, but others said it needs work.

"Given the pace of technological change and urgent need to conserve energy, it’s clear that these standards could be even more ambitious than NHTSA’s proposal," Dave Cooke, senior vehicles analyst for the Clean Transportation Program at the Union of Concerned Scientists, said in a statement.

Dan Becker, director of the Center for Biological Diversity’s Safe Climate Transport Campaign, said the law calls for NHTSA to set the maximum feasible standards and that the agency could do better than its proposal.

“The standards don’t knock our socks off, but they do begin to address the growing problem of the ‘truckification’ of the fleet, where everything becomes an SUV or a pickup truck,” Becker said.

Sedans and wagons made up around half of light-duty sales in 2005, according to EPA data. Since then, significant increases in sales of SUVs mean only around one-quarter of new car sales today are smaller passenger vehicles.

NHTSA will take comment on the rule for 60 days upon publication in the Federal Register.

The comment period for EPA’s own post-2026 rule closed earlier this month.

Issuing stronger fuel economy and vehicle emissions rules are one of the administration’s major strategies to meet President Joe Biden’s plan for half of new sales to be zero-emission by 2030. Transportation is the biggest source of greenhouse gases in the U.S., with light-duty vehicles leading the way.

Those efforts have met increasing, though not yet complete, acceptance from the auto industry. But Republicans have pushed back in Congress and in the courts, arguing that the rules are infeasible overreach.

In a separate but related rulemaking this spring, Reg. 1904-AF47, the Energy Department proposed significantly decreasing how “miles per gallon equivalent” is calculated for electric vehicles.

The old formula was out of date, DOE said, and its new calculation would require automakers to sell more electric vehicles or significantly increase the fuel efficiency of their internal combustion vehicles to compensate and still meet NHTSA’s requirements.

Litigation over prior EPA and NHTSA rules covering through model years 2026 are due for oral argument in the U.S. Court of Appeals for the D.C. Circuit in September.

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Feds home in on Ticketmaster antitrust case

The Justice Department could file an antitrust lawsuit against concert promoter Live Nation Entertainment and its subsidiary Ticketmaster by the end of the year, according to three people with knowledge of the matter.

The DOJ is aiming to file a lawsuit as soon as this fall that claims the entertainment giant is abusing its power over the live music industry, the people said. A case would add to the embattled company’s myriad policy and legal battles, and if successful, could potentially lead to a breakup of the company, POLITICO previously reported.

The timing of any lawsuit is fluid, and no final decision has been made, meaning the department could ultimately decide not to bring a case, cautioned the people who were granted anonymity to discuss a confidential matter. But a potential case against Ticketmaster has been part of recent discussions about upcoming litigation plans in the department’s antitrust division, two of the people said.

The decision on whether to sue Ticketmaster could hinge in part on resource constraints. Antitrust prosecutors already have a busy fall, with trials scheduled to start in September against Google’s search business and in October to block the merger between JetBlue and Spirit Airlines.

The DOJ is also in the midst of late-stage investigations of companies including Apple and Visa, and mergers including Adobe’s takeover of design software company Figma.

Ticketmaster is a perennial target for lawmakers, regulators and music fans, and the latest wave of criticism centered last fall on the botched sale of concert tickets for Taylor Swift. But the Swift debacle is unrelated to the DOJ's investigation, which began in earnest last summer, according to the people. In Senate testimony earlier this year Live Nation President and finance chief Joe Berchtold pinned the Taylor Swift situation on a cyberattack, but critics have said it's evidence of a company with no real competition and, therefore, little motivation to offer a quality service.

Live Nation executives were told early on that the investigation is largely focused on the Ticketmaster side of the business, and the DOJ has asked questions on topics including prohibitions on reselling tickets and exclusive deals with venues to only use Ticketmaster, according to a separate person with knowledge of the matter. The DOJ has also asked questions about contracts for artist tours, that person said.

Ticketmaster is the largest ticketing company in the U.S. However, it maintains its market share has fallen in recent years and is now significantly less than the 80% alleged by the DOJ in its 2010 case against the initial deal that merged Ticketmaster and Live Nation. It says companies including SeatGeek, AEG and Paciolan are chipping away at its dominance, and the company estimates it controls just half of the market if sporting events are factored in, that separate person said.

A Justice Department spokesperson declined to comment.

The company maintains it’s still early on in the process. “We're in regular contact with the DOJ and they haven't told us they think we're doing anything illegal or asked us to address any concerns,” Dan Wall, Live Nation’s executive vice president for corporate and regulatory affairs, said in a statement. “It would be highly irregular for the DOJ to file without that notice and a lot of dialogue afterwards. However, if they do file we are prepared to defend ourselves.”

While the investigation has gained steam in recent months, Live Nation has been under federal oversight since 2010 after it merged with Ticketmaster. As part of a settlement with the government that allowed the deal to close, the companies agreed to sell off some ticketing assets, license its ticketing software and not force venues to use Ticketmaster. That settlement expired in 2020.

Live Nation settled with the DOJ again in late 2019 over violations of the earlier agreement. The DOJ accused the company of using its dominant position in the live music industry to force artists and venues to use both its ticketing and concert promotion services. As part of the new agreement, the company agreed to extend court oversight via an independent compliance monitor through 2025.

A lawsuit is not expected to focus on violations of the past settlement, two of the people with knowledge said.

For its part, no Live Nation executives have been deposed by the DOJ, and the company is still in the early stages of its cooperation with the government, including ongoing negotiations over what documents and other information to turn over, according to two of the people with knowledge of the matter.

The DOJ is moving quickly, however, and its litigation team is involved, two people said. Jonathan Kanter, the DOJ’s antitrust head, has said one of his goals is to speed up the investigative process and bring cases to trial more quickly. Merger challenges are typically investigated and litigated on tight timelines, while so-called conduct probes like the Ticketmaster matter can take years before a case is filed.

Because of the federal scrutiny dating back more than a decade and the voluminous information the government is getting from third parties, it might not be necessary to have all of the information that the DOJ is seeking from the company in advance of filing a lawsuit, the three people with knowledge of the case said. Instead the DOJ could seek that information during the discovery process.

Kanter has said repeatedly that he prefers to litigate rather than settle enforcement actions and has indicated a preference for so-called structural remedies, such as separating lines of business, rather than behavioral fixes, which include promises not to engage in certain types of conduct.

And the DOJ is not alone. A bipartisan group of state attorneys general including California, Florida, Nebraska and Massachusetts were involved in the DOJ’s earlier cases, and a group of states could potentially join a case.

The company has also drawn Congress’ ire. Sen. Amy Klobuchar (D-Minn.), who leads the Senate Judiciary antitrust subcommittee, along with other Senate Democrats urged the DOJ to seek a breakup if its probe finds anticompetitive conduct. And at the Senate hearing in January, Sen. Mike Lee (R-Utah) questioned the wisdom of allowing the Live Nation-Ticketmaster merger to happen.

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‘We simply are nowhere’: EU slams lack of progress at G20 climate meeting

Countries were unable to agree on clear language on renewables and fossil fuels.

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Putin rules out rejoining Black Sea grain deal, despite famine fears

Poorer nations will be dependent on Moscow’s good graces for shipments of food and fertilizer.

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Powell voices skepticism at Fed's own bank rule proposal

The Federal Reserve's top bank cop, Michael Barr, is facing fierce pushback from big lenders and their GOP allies over a sweeping plan to make the industry raise more funds to guard against potential losses.

Now, skepticism is also coming from inside his own agency — including from Fed Chair Jerome Powell.

The Fed board, which places a premium on reaching consensus, voted on Thursday to propose the new capital rule in a 4-2 vote, a level of dissension unheard of on central bank regulations. The document would raise capital requirements by as much as 19 percent on the biggest banks to provide a cushion against setbacks and reduce their reliance on debt and deposits.

Michelle Bowman and Christopher Waller, both appointees of former President Donald Trump, voted no on the proposal, which has gained heightened interest since the collapse of multiple lenders earlier this year.

But even Powell, who voted in favor of the proposal and supported every effort to toughen bank rules during the Obama administration, signaled he has reservations. The proposed rules have the potential to reduce access to credit, push more lending activities into less-regulated firms outside of the banking system, and decrease the flow of trading that big banks help facilitate, he warned.

“U.S. and global regulators raised large bank capital requirements significantly in the wake of the global financial crisis,” Powell said in a statement. “While there could be benefits of still higher capital, as always we must also consider the potential costs.”

The objections underscore how deeply divided the Fed is on regulations, even as it has maintained striking unanimity in its far more visible interest rate-hiking campaign. That suggests how difficult it will be for Barr, the Fed’s vice chair for supervision, to wrap up unfinished business from the 2008 financial crisis and fortify regional banks after the failure of Silicon Valley Bank and others this year.

Banks were ramping up their arguments against higher capital before the release of the proposal, which was based on an agreement among international regulators finalized in December, 2017. They say additional capital isn’t necessary and could hurt markets and the broader economy. They also argue that standards intended for the biggest, internationally active banks shouldn’t be applied to more domestic institutions.

They’ve gained allies among some housing groups, who fear it could make mortgages more scarce for lower-income communities.

Those arguments have found purchase not just among Republican lawmakers like House Financial Services Chair Patrick McHenry (R-N.C.) but also within the regulators themselves.

The two Republicans who sit on the board of the FDIC also dissented against the proposal, voicing skepticism that the international standards underlying the proposal are well-designed.

But the split at the Fed, where board membership doesn’t have a required partisan breakdown like the FDIC and other independent regulators, is particularly unusual. In some ways, it’s a progression of the path taken by former Fed governor Lael Brainard, now President Joe Biden’s chief economic policy adviser. As the central bank’s lone Democrat, Brainard dissented against dozens of moves taken to roll back some of the post-2008 restrictions placed on big banks.

The fissures also reflect fundamental ideological differences about tradeoffs between the optimal level of capital that will help banks continue lending to creditworthy borrowers, while also guarding against serious blowups of lenders that could wound the economy more grievously.

Governor Lisa Cook asked staff during the board meeting about the effect on mortgages, while Philip Jefferson, another Fed official who has been nominated as vice chair, said he wants to ensure it doesn’t hurt access to credit for households and businesses.

The proposal deviates from international standards by imposing tougher capital surcharges on residential mortgages and consumer loans, an aspect that’s already generating worry in the housing industry. The agencies said it was intended to prevent big banks from facing lower capital requirements on those assets compared to small banks.

“If these standards are adopted, they will have a devastating impact on our efforts to increase Black homeownership and disadvantage all first-time, and, in particular, first-generation homebuyers who do not have the benefit of multi-generational wealth or higher than average incomes,” five groups, including the NAACP and National Urban League wrote to regulators this week, based on reports about the proposal.

Capital requirements will go up most significantly on megabanks deemed important to the global financial system, particularly those with extensive trading operations.

Barr defended the proposal in a statement.

“Capital is the cushion that allows a bank to absorb losses—no matter their source—and ensures that banks can continue to play their critical role serving households and businesses,” he wrote. “The goal of our actions today is simple: to increase the strength and resilience of the banking system by better aligning capital requirements with risk.”

“I look forward to comments on how specific activities may or may not be affected by the proposed changes,” Barr said in the statement. “We want to ensure that the proposal does not unduly affect mortgage lending, including mortgages to under-served borrowers.”

The public will have 120 days to provide feedback on the proposal once it’s formally published, and the pushback will likely be extensive.

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No chance of Biden pardoning his son, White House says

President Joe Biden will not pardon his son Hunter if he is convicted of the charges against him, the White House said on Thursday.

Hunter Biden has been charged with two misdemeanor tax offenses and a felony gun charge. When asked during her briefing whether there was any possibility that the president would eventually pardon his son, White House press secretary Karine Jean-Pierre on Thursday replied, “No,” and declined to comment further.

The White House statement comes the day after a new challenge for Hunter Biden in his ongoing legal troubles. He has been the subject of a yearslong investigation into failure to pay taxes in his business dealings. He was also charged last month with possession of a firearm by a person who is a known drug user over a gun he owned for 11 days in 2018, a charge that carries a maximum sentence of 10 years in prison.

The president’s son had planned to strike a plea agreement with the Department of Justice that would avert a trial and likely allow him to escape punishment on felony charges. Prosecutors in the plea deal planned to recommend that Biden receive two years of probation on the charges.

On Wednesday, however, that deal crumbled when U.S. District Court Judge Maryellen Noreika expressed concern about the details of the plea deal, which includes stipulations about not prosecuting Biden on tax crimes in the future.

“These agreements are not straightforward, and they contain some atypical provisions,” Noreika said Wednesday, suggesting that Biden’s legal team reconvene to discuss the details of the deal.

The roadblock will postpone proceedings, likely for at least a month. The White House has largely avoided commenting on Hunter Biden’s legal troubles, with the president repeatedly expressing his unequivocal love for his son.

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Biden announces action on heat as nation sizzles

President Joe Biden unveiled a series of measures Thursday designed to aid workers and residents facing severe health threats from soaring temperatures as record heat shows no signs of relenting.

Biden ticked off the devastating impacts of the recent heat waves across the country: Death, threats to vulnerable people like the elderly and unhoused, workplace safety concerns, lost economic productivity, destructive wildfires and risks to fisheries. The wide-ranging perils underscored that climate change has affected everyone in the country.

“Even those who deny that we're in the midst of a climate crisis can't deny the impact extreme heat is having on Americans,” Biden said during an event with administration officials and the mayors of Phoenix and San Antonio.

The push comes as scientists with the U.N.’s World Meteorological Organization said July is on track to become Earth’s hottest month on record. Washington, D.C., flirted with a triple-digit heat index as the broadest swath of the continental U.S. endured the type of sweltering heat that’s affected major cities Phoenix and Miami in recent weeks.

The Biden administration said the Labor Department would increase inspections at job sites to prevent heat stress, noting heat is the top weather-related killer in the United States at more than 600 deaths annually. Biden said the Occupational Safety and Health Administration already has conducted 2,600 workplace inspections as part of a new heat safety initiative.

“We should be protecting workers from hazardous conditions – and we will. And those states where they do not, I'm going to be calling them out,” Biden said.

The White House also said it would spend $7 million from the Inflation Reduction Act to improve weather forecasting and $152 million from the bipartisan infrastructure law to expand water storage in the West.

The Labor Department’s move to issue a “heat alert” reminding workers of their rights can advance public awareness of the health dangers from high temperatures, said Micki Siegel de Hernandez, deputy director of occupational safety and health with the Communication Workers of America union.

But that step is too modest, she said. The Labor Department has not yet issued final workplace safety standards for heat, a longtime ask of public health advocates, although OSHA is working on such a rule, with a review of its potential impacts on small businesses scheduled for August.

Without a federal floor, protections are uneven across states, she said.

“Everybody is anxious for them to get something out the door,” Siegel de Hernandez said. “This is a way of showing that ‘We’re still paying attention to this.”

Workplace conditions have attracted Congress’ attention in recent weeks. Rep. Greg Casar (D-Texas) refused water for eight hours in a Tuesday protest outside the Capitol to draw attention to the lack of federal standards. It comes after his state’s governor, Republican Greg Abbott, signed a law last month nixing water and rest breaks for construction workers.

Dozens of lawmakers sent a letter Monday to Acting Labor Secretary Julie Su and OSHA Assistant Secretary Douglas Parker urging them to finish that rule.

“The crisis demands immediate action if we are to accomplish our shared goals of saving lives and prioritizing worker safety and dignity,” the letter said.

The $369 billion of climate and clean energy incentives in the Inflation Reduction Act aim to address the continuing challenge of rising temperatures. Yet any positive response will take years given all the greenhouse gases the atmosphere already holds.

“We’ve got to get through this crisis in the near term and keep people safe,” Biden said. “We are making progress… but we have a lot more work to do.”

Communities are demanding immediate relief from the heat. Some lawmakers have even floated legislation, H.R. 3965 (118), to allow dangerous heatwaves to be declared federal disasters. That would unlock taxpayer dollars and resources to respond to soaring temperatures much like the Federal Emergency Management Agency does for floods, hurricanes, tornadoes and other perils.

“We need a swift, immediate deployment of resources, and that requires FEMA declaring extreme heat an emergency," Rep. Ruben Gallego (D-Ariz.), said in a statement.

Rep. Mark Amodei (R-Nev.), a co-sponsor of the bill, told POLITICO that those funds could help pay to move power supplies around when grids are stressed by people running air conditioners on full blast, perform outreach to vulnerable people like the elderly and provide transportation to cooling centers.

“Everyday life is disrupted… Nobody said we shouldn’t do anything for tornadoes or floods,” Amodei said. “It shouldn’t just be, ‘Hey, sucks to be hot. Hope you’re doing fine. Don’t call us.’”

FEMA Administrator Deanne Criswell told POLITICO in an interview that her office would be “happy to provide” assistance to Congress as lawmakers debate whether to roll heatwaves into covered disaster declarations.

But Criswell said the agency’s efforts remain focused on preparing people to withstand heatwaves through public awareness measures in advance of high temperatures, saying local communities are handling response operations.

“Making sure that we’re bringing again the right partners together to help protect people and educate them – the steps that they can take to protect themselves and their families as they’re facing this kind of heat,” Criswell said of her agency’s posture on heat.

Amodei said, however, that most local communities struggle to find the resources to execute their plans. That’s especially true of smaller, often rural governments. The task is overwhelming for cash-strapped towns faced with the reality that climate change will keep driving temperatures higher, he said.

“Maybe we ought to start having a little more [federal] involvement than, ‘Cross your fingers,’” he said.

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