Healthcare for Hybrids Act

On Nov. 18, Barack Obama (D-Ill.) and Jay Inslee (D-Wa.) introduced " The Healthcare for Hybrids Act." The act connects the dots between the financial hardships faced by Detroit automakers—in part due to the health care burden faced by the Big 3-and the need for American automakers to develop more fuel-efficient vehicles.

The bill’s "findings" section has one of the best plain-English summaries of our collective predicament. In seven easy steps, here we go:

  1. The United States imports over half the oil it consumes.
  2. According to present trends, the United States reliance on foreign oil will increase to 68 percent of its total consumption by 2025.
  3. With only 3 percent of the world’s known oil reserves, the health of the United States economy is dependent on world oil prices.
  4. World oil prices are overwhelmingly dictated by countries other than the United States, thus endangering our economic and national security.
  5. Legacy health care costs associated with retiree workers are an increasing burden on the global competitiveness of American industries.
  6. American automakers have lagged behind their foreign competitors in producing hybrid and other energy efficient automobiles.
  7. Innovative uses of new technology in automobiles in the United States will help retain American jobs, support health care obligations for retiring workers in the automotive sector, decrease America’s dependence on foreign oil, and address pressing environmental concerns.

What do Obama and Inslee want to do about it? The bill proposes that up to 10 percent of the retiree health care costs for a qualifying manufacturer be paid by federal financial assistance-that is, if the carmaker invests at least 50 percent of the those savings into alt-fuel, flex-fuel and hybrid vehicles, including the retooling of assembly lines, the retraining of workers, and other costs associated with "the diversifying of domestic production of automobiles through the offering of high-performance fuel efficient vehicles."

Auto-economist Walter McManus, who lives a stone’s throw from one of the plants threatened by General Motors’ recent closures, called Obama’s bill "a stroke of genius." McManus has recently documented in detail the crisis faced by Detroit for failing to invest in hybrids and other fuel-saving technologies. In his HybridCars.com blog, McManus wrote, " It gives no joy or satisfaction to say, ‘I told you so.’ And unlike all measures that have gone before, the Obama-Inslee legislation takes no such satisfaction. Instead, they have risen above petty partisan argument and entrenched positions with bold, out of the box thinking."

What’s so innovative about the bill? According to McManus:

"Typically, the Federal government influences investment decisions through tax credits. But, in order for tax credits to work you have to have something to tax. Companies posting losses — and the Big 3 are billions in the red — pay no taxes and therefore receive no benefit from a tax credit.

"Senator Obama and Congressmen Inslee have recognized these companies are circling the drain, and with them our national economy and energy security. Their stroke of genius is in connecting the dots: Decreasing oil consumption is clearly a top national priority but it will not happen without a national investment…At this moment in history Detroit simply does not have the financial strength needed to transform its fleet quickly enough to survive."