35-m.p.g. fuel bill could face veto

Alternative source goals missed, adviser says

BY JUSTIN HYDE | FREE PRESS WASHINGTON STAFF

WASHINGTON -- President George W. Bush's chief economic adviser warned Democrats on Monday that an energy bill, including a compromise fuel economy rule of 35 m.p.g. by 2020 reached Friday, could face a veto if several provisions aren't changed.

Al Hubbard, the director of the National Economic Council, had written congressional leaders in October with the administration's demands for any energy package to avoid a veto threat."Based on the limited information we have received, it seems the provisions under discussion would not satisfy those criteria," Hubbard said in a letter Monday to House and Senate leaders. "In fact, it appears Congress may intend to produce a bill the president cannot sign."

Hubbard said the bill appeared to fall short of Bush's target of 35 billion gallons of fuel from alternative sources by 2017. He also said the administration had the power to put much of its plan in place without congressional action.

The administration had said it would oppose any attempt to raise taxes as part of an energy bill, as well as standards requiring electric utilities to generate specific amounts of energy from renewable sources. While the tax proposals have not been agreed to, Democrats have united behind a requirement for utilities to generate 15% of their power from renewable sources by 2020.

Hubbard said the administration also wanted the bill to address any possible conflict between the National Highway Traffic Safety Administration and the Environmental Protection Agency over fuel economy rules. A Supreme Court ruling in March found the EPA had the power to set greenhouse gas controls for cars and trucks, which could clash with NHTSA's traditional role of enforcing fuel economy rules.

House Speaker Nancy Pelosi and U.S. Rep. John Dingell, D-Mich., dodged the problem in the compromise fuel economy plan. Dingell supports curbs on EPA and state powers to regulate vehicles, which Pelosi opposes.

"Legislation should clarify that there should be consultation between the agencies, while clearly establishing a single national fuel economy regulatory standard," Hubbard said.

After meeting with Hubbard for an hour Monday afternoon, Pelosi said she was still hopeful that the president would support the legislation.

Before Hubbard's letter was released, Democratic leaders said they were on track to bring the bills up for a vote by the end of the week. Democrats appear to have enough votes in the House to pass their plan, but may be challenged in the Senate to produce the 60 votes needed to end debate on a bill.

"I think yes, we do have the votes," said Senate Majority Leader Harry Reid, D-Nev. "But time will tell."

Senate Republicans have warned that renewable electricity standards could draw enough opposition to sink the entire bill. Senators in several states that rely mostly on coal for energy are concerned that energy bills will rise because of a lack of wind power, dams and other renewable sources.

Renewable electric standards "will be very troublesome for all of us in the Southeast as a mandatory rate increase," said Senate Minority Leader Mitch McConnell, R-Ky. If Democrats keep tax provisions and renewable electricity rules out of the bill, "it will be smoother sailing."