The Bush administration had previously prevented California and 12 other states from issuing stricter standards than the national level. President Obama issued an executive order allowing states to impose standards stricter than the current federal standard (something the states could constitutionally do under the principle of federalism) — but he did not stop there; he also issued an order for federal regulators to review and come up with stricter federal standards including limits on greenhouse gas emissions. So much for federalism!
These executive orders were embraced by the environmental lobby as well as by California Governor Arnold Schwarzenegger, who enthused: "Now California finally has a partner and ally in the White House.... Promises were made by President Obama, and promises were kept."
Perhaps the biggest fan of Obama's actions was the President himself. Obama proudly explained the goal of his orders to federal bureaucrats:
We will start by implementing new standards for model year 2011 so that we use less oil and families have access to cleaner, more efficient cars and trucks.... And that's why I'm directing the Environmental Protection Agency to immediately review the denial of the California waiver request and determine the best way forward. This will help us create incentives to develop new energy that will make us less dependent on oil that endangers our security, our economy, and our planet.
President Obama's explanation paints a pretty rosy picture of the federal government's supposedly benevolent action. In fact, it conveys the impression that everyone wins and nobody loses. But is there more at stake than the president would lead us to believe? Sam Kazman of the Competitive Enterprise Institute discusses the negatives that the president is all too eager to ignore.
Federal fuel economy standards are already a huge hidden burden on the industry, and the President is now proposing they make that burden even heavier. Congress is spending billions to bail out the auto industry, and here's the President coming up with new ways to sink it.
One can understand why President Obama doesn't want to explain the mind-boggling costs associated with these stricter standards. The Associated Press reports that "industry officials anticipate the costs of the federal standards could surpass $100 billion by 2020 and California's rules could cost even more. "
These orders are wrong for multiple reasons but two stand out as the most important. First, these policies will have a dangerous impact on the US economy while it is in a fragile state. The belief that mandating stricter standards will spur innovation fails because it is based on the notion that government is the source of innovation. It is the free market that produces innovation, not government mandates. Forcing manufacturers to meet arbitrary standards will drive up costs at a time when the industry is suffering from weak sales and the overall economy is suffering from dwindling expenditures.
Second, and most importantly, the federal government has no constitutional authority to mandate these standards. The Constitution does not grant power to the federal government to regulate the design specifications of private manufacturers. It is for this same reason that the Bush administration was wrong to direct the state's environmental policy as well. The checks and balances and separation of power of the Constitution are nothing but afterthoughts to Obama as he signs his new orders. This is what happens when both Congress and the states constantly delegate their authority to the executive branch. When so much power is controlled from D.C., the president can drastically effect the entire economy and even the car you may drive by just signing his name. Americans are witnessing first hand the effects of the centralized executive state.