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First Look: The Motor Vehicle Safety Act of 2010

NHTSA and Toyota safety lapses prompt tough new legislation.

by on May.05, 2010

NHTSA is just the latest regulatory agency under scrutiny for its failure to regulate.

As a result of the fatalities and law breaking at Toyota, as well as lapses in enforcement at the National Highway Traffic Safety Administration during unintended acceleration deaths, automotive regulations are about to be stiffened.

It’s not necessarily a good thing.

In a way this is a sequel: Ten years ago the fatalities and safety violations surrounding failing Firestone tires and Ford Explorer rollovers produced legislation that changed auto safety regulations and the practices of all auto and tire makers.

As the past is prologue to the future, it is not surprising that the new regulations will affect all automakers, and increase the expense of new vehicles by requiring them to pay fees to NHTSA to regulate them.

At stake are some key election year issues: How big and powerful should the government be? How are your tax dollars spent? What are they are spent on? And ultimately whether our safety agency is doing its job, as specified by the laws your representatives wrote, instead of being subverted by automakers or the former employees of automakers turned regulators.

Two aspects of new law are troublesome

The first is the incorporation of new fees or taxes instead of working within DOT’s generous budget. NHTSA, apparently, cannot be properly funded with the $79 billion taxpayers already provide. So big government gets bigger, instead of more efficient. Why is the working assumption by politicians always that more (borrowed) money has to be spent? (See Is NHTSA Underfunded in DOT’s $79 Billion Budget?) DOT has a huge budget, but little of the money is allocated to auto safety. Motor vehicles are responsible for 95% of the nation’s transportation deaths but only 1% of the Transportation budget.

The second problem is as worrying. NHTSA would also get the authority to impose unlimited fines on automakers. I’m not against fines, but no matter how egregious the behavior of auto companies – or in the current headlines, say, Wall Street firms or oil companies – the U.S. government was set up to provide limits to power with checks and balancesnot un-limits to power.

This “divine right of kings’ proposal” in my view demands moderation. Moreover, given the amounts of money involved, it is likely to be the cause of much lobbying in “pay to play” Washington as corporations work behind the scenes to kill it, so it contributes to the ongoing problem of money in politics.

The first House hearing on what will be a complex bill occurs tomorrow in front of the Energy and Commerce Subcommittee. There will also be hearings later in the Senate on a similar, but slightly differing bill. Ultimately, unelected staff members of the politicians holding forth at the hearings will reconcile the two bills.

Some of the upcoming testimony no doubt will be a rehash of the obvious problems widely discussed during multiple Toyota hearings in both the House and Senate. (See Horror of Saylor Fatal Lexus Accident Reviewed at Opening of Congressional Hearing) However, this will be the first public discussion of the proposed changes, including the unlimited fines, additional user fees, new compliance reports and strict timelessness requirements.

Invited witnesses include:

  • David Strickland, Administrator, NHTSA
  • Dave McCurdy, President and Chief Executive Officer, Alliance of Automobile Manufacturers
  • Michael J. Stanton, President and Chief Executive Officer, Association of International Automobile Manufacturers
  • Joan Claybrook, Former Administrator, National Highway Traffic Safety Administration
  • Clarence Ditlow, Executive Director, Center for Auto Safety
  • Jim Harper, Director of Information Policy Studies, Cato Institute

This is a mixed group from an auto industry perspective. Both Claybrook, a former NHTSA administrator, and Ditlow, a Nader acolyte, have already suggested drastic changes in safety regulations and increases in fines during previous Toyota hearings.

Moreover, much of what they have said makes sense. The real governance issue is how to reform auto safety regulations, instead of allowing populist rhetoric and industry bashing to become law.

NHTSA, of course, already has extensive power to regulate motor vehicles — and is about to get more. The new legislation seeks to improve auto safety and strengthen NHTSA by increasing the agency’s almost non-existent expertise in vehicle electronics (See NHTSA Has Five Electrical, One Software Engineer!), and requiring new safety standards for vehicles run largely by electronic systems.

The law also seeks to beef up the agency’s enforcement authorities, while increasing transparency and accountability in auto safety. Moreover, as always in Washington, there is the “who pays” for the additional expense argument. Short fiscal answer: no matter who pays, they only pay about one-third of the real cost, we are borrowing and printing money to cover the rest.

Most of the new bill appears consistent with Congressional intent as stated in previous legislation. NHTSA was established in 1970 to save lives, prevent injuries, and reduce the economic cost of crashes. The Federal agency conducts crash data analysis, research, and rule making for vehicle safety. It is also responsible for overseeing issues related to fuel economy, child car seat performance, and – especially after deadly Firestone tread separations – tire safety.

NHTSA is also responsible for collecting consumer complaint data, investigating potential vehicle defects, and overseeing recalls of vehicles with safety defects.

Here is a closer look at what is in the draft of what will eventually become the Motor Vehicle Safety Act of 2010. As always, the devil will be in the details of the final bill.

Vehicle Electronics and Safety Standards

The legislation would strengthen NHTSA’s sadly lacking expertise in electronics by creating a new Center for Vehicle Electronics and Emerging Technologies within NHTSA. The objective is “to build, integrate, and aggregate the agency’s expertise in new technologies across all vehicle safety components, including research and development, defects investigation, and rulemaking.” It would also encourage engineering students interested in vehicle safety to work in government by establishing a fellowship program. (more…)

Carmakers Expected to Push Back on New Auto Safety Bill

Industry leaders to testify in Washington on Thursday.

by on May.05, 2010

Senator Jay Rockefeller is one of eight lawmakers sponsoring the Motor Vehicle Safety Act of 2010.

Driven by the ongoing safety scandal at Toyota, Congress appears intent on pushing through new auto safety rules, this year, and a proposal introduced into the Senate would both improve funding for the National Highway Traffic Safety Administration, and give the agency more teeth to enforce its will.

Similar to a measure already introduced into the House of Representatives, the proposal is causing some concern among industry leaders – which they’re expected to underline during a hearing by the House Energy and Commerce Committee, on Thursday.

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A Safe Choice!

The flurry of activity on Capitol Hill follows the recall of roughly 6 million vehicles by Toyota and that automaker’s decision to pay a $16.4 million fine for failing to notify NHTSA of problems with sticky accelerators in a timely manner.  Though a record fine, that figure was still limited by current rules that might be lifted by Congress.  A similar infraction, in the future, might generate penalties pushing into the billions.

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