CFA News Update- July 11, 2011


56 MPG Fuel Economy Standard by 2025 Good for Consumers and Automakers

With the Obama Administration poised to make a decision on extending fuel efficiency requirements to 2025, CFA released an issue brief two weeks ago arguing that the “scenario of a five percent per year increase to 56 mpg is the lowest level at which the standard should be set.” This gradual increase would result in an average of $6,000 in consumer savings per vehicle compared with vehicles that meet the 2016 standard, increased auto production and employment, and a one-third reduction in reliance on oil imports, according to the CFA analysis, making the standards beneficial to consumers, automakers, and national energy security. “Setting a requirement of 56 mpg by 2025, enables car companies to gradually reach the standard that consumers want. In addition, any increase in the cost of the vehicle will be immediately offset by savings at the pump,” said CFA Director of Research Mark Cooper.

The automobile industry is urging a “slow-lane, off-ramp” approach that moves slowly in the early years and more swiftly in the later years and allows an off ramp that would lower the standards significantly, according to a CFA release challenging this approach. This result would be to lower consumer savings by at least $50 billion, increase gasoline consumption and oil imports by hundreds of millions of barrels, and reduce employment in the auto sector by at least 50,000 jobs, according to CFA’s analysis. While the target level is important, “we have repeatedly emphasized the importance of the steady, long term approach, because it allows consumers and the auto industry to adjust over time, while providing certainty about the future standard,” said CFA Director of Public Affairs Jack Gillis, author of The Car Book.

Fundamental Reforms of National Flood Insurance Program Needed

At a recent Senate Banking Committee hearing on reauthorization of the National Flood Insurance Program (NFIP), CFA Legislative Director Travis Plunkett testified that fundamental reform of the program is needed to address long-term, structural flaws that are harming consumers and taxpayers. Plunkett said that the worst thing government can do is run an “insurance” program that is not true insurance, but an unwise and untargeted subsidy program that misleads consumers into putting their homes, businesses and lives at risk in areas that are dangerously flood-prone and that often unfairly subsidizes affluent individuals and contractors who do this building. Using draft legislation from 2007 as a model, Plunkett recommended that the NFIP be reauthorized for no more than two years, that a study on possible solutions to the fiscal and management problems of the NFIP be completed within eighteen months, and that Congress pass further legislation to revamp and improve the NFIP following the recommendations of the study. “As meaningful changes to the NFIP to deal with these systemic problems have not been made, the time has come for Congress to begin the process of evaluating how to revamp the program to make it fiscally sound or to end the insurance aspect of the program and allow more effective alternatives to take its place,” Plunkett said.

Robust Crib Safety Standards Take Effect

New crib safety standards issued by the Consumer Product Safety Commission (CPSC) went into effect July 28th, making U.S. crib safety standards the most robust in the world. Sen. Mark Pryor (D-AR), Sen. Kirsten Gillibrand (D-NY), and CPSC Commissioner Robert Adler joined CFA and several other consumer and public safety organizations at a press conference held in celebration of the tough, new standards. A press release on the crib standards is available here.

The standards, mandated by the 2008 Consumer Product Safety Improvement Act, ban the sale and manufacture of drop side cribs and require stronger mattress supports, more durable hardware and more rigorous safety testing. "Due to the CPSIA, its congressional supporters, and CPSC leadership, new cribs will now be meeting the world’s most robust and protective safety standards,” said CFA Senior Counsel Rachel Weintraub. “This will give parents and caregivers the long overdue peace of mind that, when they purchase a new crib, their baby will be in a truly safe place."

CFA Calls for Alcohol Calorie Labeling on Chain Restaurant Menus

In an effort to help consumers maintain a healthy weight and reduce health care costs associated with obesity, Congress passed legislation last year instructing the FDA to require chain restaurants to disclose calorie content for standardized menu items. CFA strongly supported that requirement. But when FDA issued a formal regulatory proposal to implement the requirement, it proposed to exempt alcoholic beverages from calorie disclosure requirements in chain restaurants. In an Op-Ed placed in Food Safety News, Chris Waldrop, Director of CFA’s Food Policy Institute, made the case for requiring chain restaurants to disclose the amount of calories in alcoholic beverages. “Two-thirds of Americans are obese or overweight,” he wrote. “But giving consumers basic nutrition information can at least allow those who care about their health to make informed choices about foods and beverages they consume away from home, which now account for as much as 50 percent of the average American’s food budget.”

Consumer Groups Call for Strengthened Privacy Protections

Responding to trade and business groups’ call for the status quo in the U.S. approach to privacy, CFA joined other consumer advocacy groups in writing to urge Congress to pass meaningful privacy legislation. Citing the inadequacy of self-regulation and the success of the federal Do Not Call registry, the groups argued that the time has come for effective privacy protection. “We are firmly committed to innovation and economic growth and we share the enthusiasm that new technologies and new businesses generate,” the groups wrote. “But it is clear that there must be stronger safeguards in place to protect the interests of consumers and Internet users. The self-regulatory ‘notice and choice’ approach has simply failed.”

OECD Releases Internet Policy Principles

The Organization for Economic Cooperation and Development (OECD) has released a Communiqué laying out broad principles to promote openness and the global free flow of information online. CFA and Consumers Union issued a joint statement supporting the Communiqué’s focus on promoting robust competition in the provision of high speed broadband Internet. Ultimately, however, the groups did not endorse the Communiqué because of concerns that it may encourage or allow governments to use Internet intermediaries to police online content. “Although we recognize the importance of protecting intellectual property online, Internet intermediaries are neither competent, nor the appropriate entities to determine the legality of the content passing through their networks, and should not be charged with blocking or filtering potentially ‘unlawful’ online activity. We fear that such a principle would undermine access and freedom of expression, the very goals that this document seeks to promote,” said CFA Director of Research Mark Cooper.