And as we’re taking unprecedented steps to save energy and generate new kinds of energy for our homes and businesses, we need to do the same for our cars and trucks.
Right now, two of America’s iconic automakers are considering their future and facing difficult challenges. But one thing we know is that for automakers to succeed in the future, these companies need to build the cars of the future. Yet, for decades, fuel economy – and fuel economy standards – have stagnated, leaving American consumers vulnerable to the ebb and flow of gas prices, and leaving the American economy ever more dependent on the supply of foreign oil.
We must create the incentives for companies to develop the next generation of clean energy vehicles – and for Americans to drive them.
That is why my administration has begun to put in place higher fuel economy standards for the first time since the mid-1980s – so our cars will get better mileage, saving drivers money and spurring companies to develop more innovative products. The recovery act also includes $2 billion in competitive grants to develop the next generation of batteries for plug-in hybrid cars. We’re planning to buy 17,600 American-made, fuel-efficient cars and trucks for the government fleet. And today, Vice President Biden is announcing a Clean Cities grant program through the Recovery Act to help state and local governments purchase clean energy vehicles, too.
My budget also makes unprecedented investments in mass transit, high-speed rail, and in our highway system to reduce the congestion that wastes money, time, and energy. And it invests in advanced biofuels and ethanol, which, as I’ve said, is an important transitional fuel to help us end our dependence on foreign oil while moving toward clean, homegrown sources of energy.
And while we are creating the incentives for companies to develop these technologies – we are also creating incentives for consumers to adopt these technologies. The Recovery Act includes a new tax credit of up to $7,500 to encourage Americans to buy more fuel-efficient cars and trucks.
In addition, innovation depends on innovators doing the research and testing the ideas that might not pay off in the short run – or at all – but when taken together hold incredible potential over the long term. That is why my Recovery plan includes the largest investment in basic research funding in American history. And my budget includes a ten year commitment to making the Research and Experimentation Tax Credit permanent – a tax credit that returns two dollars to the economy for every dollar we spend.
And this is only the beginning.
My administration will be pursuing comprehensive legislation to move toward energy independence and prevent the worst consequences of climate change – while creating the incentives to make clean energy the profitable kind of energy in America.
The fact is, we place limits on pollutants like sulfur dioxide, nitrogen dioxide, and other harmful emissions. But we haven’t placed any limits on carbon dioxide and other greenhouse gases. This is called the carbon loophole.