Grades For Claims: The Democratic Party & The American Auto Industry

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(credit: ANTONIO SCORZA/AFP/Getty Images)

(credit: ANTONIO SCORZA/AFP/Getty Images)

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  autos arrows plug v2 Grades For Claims: The Democratic Party & The American Auto Industry

the car connection logo v2001 Grades For Claims: The Democratic Party & The American Auto Industry

Last week, the GOP issued its official Republican Party platform, and in that long, winding document were several items of interest for drivers — namely, a statement against pay-as-you-drive taxes for motorists and harsh criticism of the Environmental Protection Agency. Hopefully, you had the chance to digest it all over the holiday weekend.

Now, as all eyes turn to Charlotte, North Carolina, Democrats have issued their own party platform. What does it say? The biggest findings for auto fans are undoubtedly its praise of the Detroit auto bailout, its take on environmental regulations and its discussion of America’s transportation infrastructure.

We’ll go through each of the three topics, looking at what Democrats say, then grading them for accuracy.

1. We (re)built this

Under the section entitled “An Economy Built to Last”, Democrats spill a fair amount of ink talking about the auto industry bailout. Rather than summarizing the platform’s talking points, we’re going to quote two key paragraphs:

“President Obama and the Democrats boldly rescued America’s auto industry, saving more than one million jobs, preventing the collapse of the industry’s supply chain, and shoring up countless communities, while revitalizing the backbone of America’s manufacturing sector. Mitt Romney thought the government’s action would destroy the auto industry; he and Republican leaders opposed the support President Obama extended to rescue an iconic industry.”

“All three of America’s biggest auto manufacturers – Chrysler, GM, and Ford – are stronger today because of President Obama’s decisive leadership. GM and Chrysler have repaid their outstanding loans years ahead of schedule, new American cars are inspiring pride, and the auto industry added more than 200,000 jobs in the last three years.”

Grade: B. Democrats are correct in taking credit for spearheading the bulk of the auto bailout. And although we have no way of knowing what might’ve happened if the bailout hadn’t been approved, it’s clear that Romney was adamantly opposed to it (well, until he decided to take “a lot of credit” for it). We’re not 100 percent sure where Dems get their job numbers, but there’s no arguing that Detroit’s auto industry is doing very brisk business nowadays.

On the downside, while the Democrats are truthful in saying that Chrysler and General Motors have repaid their bailout loans, that statement conveniently overlooks the fact that much of the money invested in GM was converted to equity in the company. Thanks largely to GM’s downward-drifting stock price, the federal government now stands to lose about $25.1 billion on the bailout (though in fairness, that’s still far, far better than the $44 billion loss that the Obama administration initially projected).

One other sin of omission we should note: While many Republican leaders did oppose the bailout, President Obama received occasional help from others across the aisle — including one Paul Ryan. And let’s not forget that the seeds for the Detroit bailout were sown by Obama’s Republican predecessor, George W. Bush, who bypassed Congress and issued $17.4 billion in loans to GM and Chrysler during the lame-duck month of December 2008.

Our last quibble: While it’s clear that Chrysler and General Motors owe Democrats a debt of gratitude, we’re not sure that Ford should be included in that number, since it didn’t receive bailout funds at all.

2. Environmental regulations and CAFE standards

The Obama administration and the EPA have been working for some time on new corporate average fuel economy regulations (aka CAFE standards), and last week, those regulations were officially confirmed. The Democrats tout this in their platform:

“President Obama forged an agreement with American carmakers to nearly double fuel efficiency standards in the coming years, changes that will save a typical car owner more than $8,000 in fuel costs over the life of their vehicle and reduce American consumers’ fuel costs by almost $2 trillion.”

Grade: A-. The new CAFE standards will push fleet-wide fuel economy to 54.5 mpg by the year 2025, and the $8,000/$2 trillion savings figures are consistent with those previously used. It’s also true that U.S. automakers played a major role in the setting of these new guidelines.

What’s left out? The fact that U.S. automakers played such a key role that some foreign companies felt completely left out of the discussion. Volkswagen and others have complained that the new regulations set different standards for different types of vehicles — specifically, lowering the fuel-economy bar for trucks and SUVs, which are made mostly by Detroit automakers. Moreover, the regs don’t recognize diesel as a clean alternative fuel, which is a huge blow to Euro companies, who like a good diesel engine. Add all that together, and foreign automakers will have to work harder than their U.S. rivals to meet the EPA’s new regulations.

Another point: many argue that the new standards will cause car prices to rise. That’s probably so, due to the cost of new technology, but estimates of the increase vary significantly. In some scenarios, the $8,000 in fuel savings outweighs the increased sticker price; in others, it doesn’t. We don’t have a clear answer on this bit, so for now, it’s a wash.

3. Infrastructure

The GOP platform criticized America’s transportation infrastructure, but didn’t offer many ideas for repairing it. The Democrats veer a little more closely to the nitty-gritty:

“Roads, bridges, rail and public transit systems, airports, ports, and sewers are all critical to economic growth, as they enable businesses to grow. That’s why President Obama and Democrats in Congress have enacted infrastructure investments that will sustain our Highway Trust Fund and provide states, U.S. territories, and communities with two years of funding to build needed infrastructure…. The President has proposed to go substantially further, including a significant up-front investment in our infrastructure followed by sustained increases in investment paid for with part of the savings from winding down our overseas wars, together with reforms that will better leverage government dollars and target significant projects.”

Grade: C+. Dems deserve some credit for envisioning ways to pay for infrastructure improvements. However, whether those improvements will benefit from funds freed up after the U.S. winds down its overseas wars is a matter for debate. And the “reforms” mentioned in that last sentence could really use some fleshing out.

A bigger criticism: the “two years of funding” that the Democrats mention seems to refer to the recently passed surface transportation bill — a monstrous piece of legislation that Transportation Secretary Ray LaHood once called “the worst transportation bill I’ve ever seen.” And not only was it a dodgy bit of legislation, but it was also made possible by Republicans and Democrats, working together in a joint committee. Yes, Obama signed it into law, but it wouldn’t have been possible without a handful of compromise-minded GOPers.

In sum

Unlike fact-checking a speech, evaluating a party platform is difficult, because it’s nearly impossible to judge such a document without dragging your own beliefs into the matter. In their platforms, Democrats and Republicans identify similar problems, but propose very different fixes. Each of those approaches is a gamble, so the only way to assess them objectively is to see which party offers the most evidence in support of its plan (even though, given the nature of platforms, that evidence is necessarily biased).

On that count, Democrats eke out a slight edge over their Republican rivals. Both rely heavily on ideology to make their points, but the Dems offer more concrete plans for improvement and evidence to back up their arguments. Of course, voters will have the final say on which party wins the debate — and the White House.

Agree? Disagree? Feel free to hash it out in the comments below. Just remember to keep the comments on-topic and pithy, as always.

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This article originally appeared at The Car Connection.

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