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More Mileage, Less Pollution; Restraining Special Needs Kids; Vehicle Standards Plan; California Cash Crisis; Israeli Prime Minister in Washington
Aired May 19, 2009 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: More miles per gallon, less damage to the environment. But what will it cost you?
Just minutes from now, President Obama announces new standards for vehicle mileage and emissions. We will, of course, bring that announcement to you live.
Let's get a preview right now from Christine Romans of our CNN Money team and Jill Dougherty at the White House.
Christine, first to you.
What specifically is the president proposing here?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: The president specifically is proposing that we get more out of a gallon of gas than the cars that we drive, and that we put less junk out of the tailpipe, I guess. You know, the catalytic converter can scrub a lot of stuff out of the exhaust, but carbon emissions are something that you can really only cut by using less fuel, and so both of the things are what they're trying to attack here.
Racing up by about four years the timeline for better fuel efficiency for cars -- 35.5 miles per gallon is what they're looking for. That's going to save lots of barrels of oil over the course of a lifetime if they can do this, 1.8 million barrels of oil, 86 days worth by 2016, they think. And it's going to add, Tony, about $600 to the cost of a car.
So you're going to pay for it out of your pocket, if you will. There's another $700 in some of the new standards that have already been passed by Congress. So, $1,300 overall in the cost of a car.
But look at it this way -- the savings in the cost of gas from the fuel efficiency is about $372 a year. So in a few years, you will have made up for that cost. And then, of course, there's environmental benefits as well. So this is something you're going to see the auto industry and the president and his environmental team all standing up together and speaking, I think, with one voice about these new rules.
HARRIS: Well, wait a minute, Christine. Why is the auto industry on board with this? In the past it certainly hasn't been.
ROMANS: Well, the auto industry, Tony, as you and I both know, the president, as he joked himself recently, has been named Consumer Reports Car Executive of the Year or something; right?
HARRIS: Yes.
ROMANS: No, he is -- the government is running two of these companies. One is bankrupt and one, many say, is on the verge. GM -- Ford is the only auto company that's not had to take taxpayer dollars, we will point out.
And also, they want one set of standards, not a bunch of patchwork of competing state standards and federal regulations. This is one standard. And so the clarity of that, as they look forward with their business plans and try to emerge as a healthy industry, is something that industry folks are saying will help them in the long run.
HARRIS: What do you think, the death of the SUV, bigger vehicles?
ROMANS: You know, these rules don't dictate how big a car is, Tony, but you don't have to reach very far to think if you're looking for better fuel efficiency, you're talking about lighter materials and smaller size. It's not dictated in these rules, though.
HARRIS: All right, Christine. Appreciate it. Thank you.
ROMANS: Sure.
HARRIS: So, let's do this -- let's take a closer look at the CAFE standards.
First of all, that standards for Corporate Average Fuel Economy. Did you know that?
The current standard for cars is 27.5 miles per gallon. It was set at that level in 1990. Standards were first set in 1978 in response to the oil embargo. It was 18 miles per gallon then.
Man. Companies that didn't meet the current standards, well, they face a fine.
The new fuel economy standards, just the latest move by President Obama that is reshaping the auto industry. Let's talk about the bigger picture here.
CNN's Jill Dougherty on duty at the White House for us.
Jill, good to see you again.
The president tackling a lot here with these proposals. Why does he think he can accomplish all this now when no one's been able to make a real impact on the industry before?
JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, certainly the political winds have shifted. I mean, just look at when this was tried back in 2004 by California. They did not get very far. They wanted a waiver, and to introduce much of what we're looking at today being proposed by the president, but they could not get a waiver from the Bush administration. Now it's a different administration and it's a different economic situation.
I was just looking at the list, Tony, by the way, of who is here. It's a heavy-hitter list of all of the oil companies. You know, Ford, GM, Nissan, BMW, et cetera.
They're all here, which you might not have seen a while ago. But the auto industry in the United States is in a completely different environment, and it knows also that to be competitive, they need some new things.
And some of the companies that Christine was mentioning are in trouble. They're getting money from the government, so they don't have a lot of means to talk back at the government. And then, also, on the good side, they do want predictability in terms of what they gear up to build.
HARRIS: Absolutely. Yes.
Hey, Jill, gas prices are lower than last summer. And consumers are going back, we understand, to some bigger vehicles. So, how would these new regulations affect this trend? And maybe it cuts to the question I asked Christine just a moment ago. Are we talking about, with these new standards, the end of larger vehicles, the end of the SUV and some trucks?
DOUGHERTY: Well, probably not, because the way the administration is explaining this, and if it works out the way they say, you would have choice across the expanse. You would be able to get a regular -- let's say a very small efficient car, a medium car, or you might even be able to get an SUV. But these efficiency standards and also emission standards would apply across the board. So, you would get an SUV, but it would have to be more efficient and also less polluting.
HARRIS: OK. And Jill, we're going to get a White House Rose Garden event in just a couple of minutes, right here in the CNN NEWSROOM.
Jill Dougherty at the White House for us.
Jill, thank you.
A bill before the Senate today could make it harder for your credit card company to raise your interest rate. The legislation would require a 45-day notice before a rate increase. A consumer would have to be 60 days behind on their payments before the company could raise the interest rate on their balance. The bill would also prohibit some fees and set a minimum age requirement.
The banking industry warns the new restrictions could hurt consumers by limiting access to credit. Californians voting today on six budget measures to deal with a sobering cash crisis. Governor Schwarzenegger warns dire cuts are ahead if the propositions fail.
Polls indicate all but one will. Experts say there is very little voter interest because the ballot initiatives are just too confusing and people are tuning out of the constant budget bickering coming out of Sacramento. The state wiggled out of a $42 billion shortfall in February, but it is still $15 billion in the red.
The faces behind the story. Governor Schwarzenegger, who rode to office when voters recalled an unpopular governor, now his own approval rating has fallen into the low 30s because he hasn't had the political muscle to fix the budget. Other faces behind the story, 310,000 California public school teachers trying to keep their jobs and do them with a lot less money.
Governor Schwarzenegger predicts heavy-handed cuts are coming in California. What are they exactly?
Josh Levs has been looking into the budget mess in California.
And Josh, what are you finding?
JOSH LEVS, CNN CORRESPONDENT: You know, Tony, it's interesting. You can see that it's touching all aspects of life, really. I mean, that's what happens when you have a massive budget; right?
And we know, we've heard it so many times, California has a budget that's bigger than a lot of nations out there. So, when they're talking about massive cuts, it obviously affects a ton of people.
Great story here from TIME.com, which is partner with CNN.com. You can actually see it from CNN.com.
And They have done a really good job of breaking down some examples. So, Tony, do you want to go through some of these?
HARRIS: Yes, let's do that.
LEVS: Let's do this. We've got some graphics. Let's start the process right now.
I want you to see this first one, which talks about how many young people -- they would have to chop health care for 225,000 children. So, obviously, again, we're talking about a lot of people for any cut.
Next thing here, they're talking about 5,000 state jobs. And, you know, that's for now. Let's see what happens in future steps with the economy.
They're talking about getting rid of a week of school. Now, you know, some kids might like that, they might cheer, but the truth is some people feel like the school year is already not long enough. HARRIS: Exactly.
LEVS: There's a lot of challenges out there. And when we're talking any cutbacks in schools, it's known how tough it is to even improve the schools as they are. So, cutbacks is not what you want to hear in the nation's schools.
Next one, check this one out. University spending, more than $1 billion they would have to save, according to the governor. This would be a step they have to take.
And then, Tony, some California landmarks that will hit the auction block.
HARRIS: Yes. Yes. I've been following this a little bit. Look at that, the Los Angeles -- I'm thinking about the Olympics there.
LEVS: Yes, that's right. I believe it was '32, so all those decades ago. And then again in '80.
So you've got this major site. They're estimating $400 million.
And you know what else is interesting? Check this last one out, San Quentin. They're talking about the state prison over there.
Estimated value for that area, a billion dollars. So, I mean, how much would these things actually fetch at auction in this economy? Who knows?
But Tony, the key here is that we're talking about major sites, massive expenses, and a huge budget. And obviously, that has ripple effects not just for the West, but also for the whole country.
HARRIS: Good point.
And a quick point here. Even if these measures pass -- and the indications are that all but one will fail -- there will still need to be some cuts.
LEVS: Really important angle to this. Let's not forget that.
Today, there's a lot of focus on what happens on these measures. But I've got a graphic for you here. Check this out.
This is from the story. Just look at this sentence: "Even if the controversial budget measures pass, state officials say California must still trim $15.4 billion," Tony, from its budget.
So that's how much they have to trim. That's how huge the budget is in California.
By the way, we would love to hear from you in you're in California. You can write us here, CNN NEWSROOM, CNN.com.
I just this second posted some on my Facebook page, Josh Levs CNN. If you live in California, even if you don't, we would love to hear from you, but especially if you live in California. We want to hear from folks.
What are your thoughts on this? I've also got Twitter.com/JoshLevsCNN.
Tony Harris is up on Facebook, so use his page.
HARRIS: Am I really?
LEVS: You are. Isn't that great? It's a new day, it's a new dawn, it's a new light on the Internet.
HARRIS: What it is, is an outrage. All right, Josh. Appreciate. Thanks, Josh.
We are awaiting President Obama, who is expected to announce new fuel standards for the auto industry in just a couple of minutes. At the same time, the president has been weighing in on the Middle east in meetings with Israeli Prime Minister Benjamin Netanyahu. What is President Obama doing to move things along there?
(COMMERCIAL BREAK)
(WEATHER REPORT)
HARRIS: Pakistan's refugees will get a lot of help from the United States. Just a short time ago, Secretary of State Hillary Clinton announced $100 million package aimed at easing their suffering. Clinton called on individual Americans to support the effort by making $5 donations.
An estimated 1.5 million people have fled the fighting in Pakistan's Swat Valley and are living in sweltering tent cities. The United Nations says it could be the worst humanitarian crisis since the Rwandan genocide.
Happening now on Capitol Hill, Israeli Prime Minister Benjamin Netanyahu making the rounds. He has been meeting with House Speaker Nancy Pelosi, as well as the Senate Foreign Relations Committee. The prime minister's visit with congressional leaders comes after talks yesterday with President Obama.
Our Senior White House Correspondent Ed Henry sorts out the main issues on the table.
(BEGIN VIDEOTAPE)
ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): For the first time, President Obama put a timetable on talks with Iran, saying he expects results on stopping its nuclear program by the end of the year.
BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: The important thing is to make sure that there is a clear timetable of -- at which point we say these talks don't seem to be making any serious progress.
As I said, by the end of the year, I think we should have some sense as to whether or not these discussions are starting to yield significant benefits.
HENRY: New Israeli Prime Minister Benjamin Netanyahu has been skeptical of open-ended U.S. talks with Iran, so this could bide time to prevent Israel from launching a preemptive attack, a clear olive branch from Mr. Obama after two hours of talks on Mideast peace.
OBAMA: I assured the prime minister that we are not foreclosing a range of steps, including much stronger international sanctions, in assuring that Iran understands that we are serious.
HENRY: The body language seemed warm.
OBAMA: He has both youth and wisdom.
BENJAMIN NETANYAHU, PRIME MINISTER OF ISRAEL: I dispute youth, but that's good.
HENRY: Mr. Obama pledged to be actively engaged in the peace process and pressed the prime minister to stop the expansion of Jewish settlements.
OBAMA: All the parties involved have to take seriously obligations that they previously agreed to. I think that we can -- that there is no reason why we should not seize this opportunity and this moment.
HENRY: The Israeli leader showed a glimmer of flexibility on recognizing a Palestinian state, conditioned, of course, on the acceptance of Israel as a Jewish state.
NETANYAHU: And I think we can come at a substantive solution that allows the two peoples to live side by side in security and peace. And I add prosperity, because I'm a great believer in this. So I think the terminology will take care of itself if we have the substantive understanding, and I think we can move forward.
HENRY (on camera): The president also pushed the Palestinians for concessions, saying there can't be progress unless the attacks on Israel stop. He'll get a chance to press that point directly with the Palestinian president, Mahmoud Abbas, when he visits next week.
Ed Henry, CNN, the White House.
(END VIDEOTAPE)
HARRIS: All right. I understand we're moments away now from the president's White House Rose Garden event. And, of course, the president set to announce any minute now -- let's take that shot full on a beautiful day in Washington, D.C.
The president to announce new rules for the road, stricter standards, really, for vehicle emissions and mileage. The announcement coming up in just a couple of minutes.
Peter Valdes-Dapena, joining us now from our CNN Money team. And Peter, we're talking about new rules for the road moving forward. If you would, outline some of the important bullet points, some of what we're going to hear from the president today.
PETER VALDES-DAPENA, CNNMONEY.COM CORRESPONDENT: Sure. Well, what we're going to hear is that, up until now, recently, the fuel economy standard goal for cars and trucks combined, everything, had been 35 miles per gallon by 2020. Under these new rules, it's going to be 35.5 miles per gallon by 2016.
And part of the goal here is not just saving fuel, but also reducing greenhouse gas emissions. The reason we're doing this -- the reason the administration is doing this is because states like California had been working to enact their own greenhouse gas emission rules which would have amounted to a separate fuel economy standard. So, instead, what we're doing is we're moving towards basically a California standard for the entire country.
HARRIS: Well, Peter, does the industry get sort of a reasonable timetable to meet these new rules?
DAPENA: The industry seems to be pretty much on board with this standard.
HARRIS: Yes, it does. It does.
DAPENA: They think they can do it. And most importantly, it's a single standard and it's predictable, they know what they're getting. And with some electric cars, hybrids, turbo-charging, and technology like that, there is technology on board that can help them to meet these overall averages, although it may mean they have to boost sales of small cars in the short term to do it.
HARRIS: So, the industry in the past has not been in favor of these new, stricter, tougher standards. And is it just sort of the -- we see the president -- is it just sort of a change in the political climate right now?
DAPENA: Yes, I think it is. I think it's a realization that, look, these standards are coming. You're not going stop it. And it's better to know what the standards are and have a set standard than to just keep fighting it and not knowing what you're getting.
So, the industry finally compromised and said, look, I think we can live with this, I think we have the technology to do this. And we can move forward under these rules.
HARRIS: And the other truth here is -- no, I'm not go to have enough time to ask the next question.
Peter, appreciate it. We'll talk to you after the president's remarks.
(APPLAUSE)
OBAMA: Thank you. Thank you, everybody. Thank you. Thank you very much. Thank you.
Please, everybody have a seat. Have a seat.
What an extraordinary day. The sun is out because good things are happening.
Before I get started, just some preliminary introductions. I'll probably repeat them in my formal remarks, but I want to make sure that I acknowledge some people who have been critical to this effort and critical to so many efforts at the state and federal levels.
First of all, Speaker Nancy Pelosi, who has just been cracking the whip and making Congress so productive over these last several days. We are grateful for her.
My wonderful secretary of Transportation, Ray LaHood is in the house.
Lisa Jackson, the outstanding administrator of the EPA.
Some of the finest governors in the country are here. Let me take them in order of good looks.
Sorry, Arnold.
Jennifer Granholm of Michigan; Governor Deval Patrick of Massachusetts; and Governor Arnold Schwarzenegger of California.
(APPLAUSE)
Barbara Boxer just had to leave, but the head of the Environment Committee in the Senate who has just done outstanding work.
And Senators Feinstein, Levin and Stabenow couldn't be here because they're busy voting on credit card legislation that we're going to get done before Memorial Day.
And we've got two outstanding members of the House of Representatives, John Dingell -- where's John? Right here, the dean of the House, and who has done so much extraordinary work around these issues. And Sandy Levin.
Please give them a round of applause.
(APPLAUSE)
I also want to mention Ron Gettelfinger of the UAW, our president who has just been a great leader during some very trying times in the auto industry.
And Carol Browner, who helped to make this all happen today. Please give Carol Browner a big round of applause.
(APPLAUSE) Since I'm acknowledging everybody, I'm in a valuable (ph) mood today, let me go ahead and acknowledge my other members of the cabinet who are here who are part of our energy green team and do just outstanding work on an ongoing basis.
First of all, my secretary of Labor, Hilda Solis.
(APPLAUSE)
The guy who's just cleaning up the Department of Interior and doing an extraordinary job, Ken Salazar.
(APPLAUSE)
Our head of HUD, Shaun Donovan.
(APPLAUSE)
And our Commerce secretary, Gary Locke.
Now, thank you all for coming to the White House today, and for coming together around what I consider to be an historic agreement to help America break its dependence on oil, reduce harmful pollution, and begin the transition to a clean energy economy. This is an extraordinary gathering.
Here, we have today, standing behind me, along with Ron Gettelfinger and leadership of the UAW, we have 10 of the world's largest auto manufacturers. We have environmental advocates, as well as elected officials from all across the country. And this gathering is all the more extraordinary for what these diverse groups, despite disparate interests and previous disagreements, have worked together to achieve.
For the first time in history, we have set in motion a national policy aimed at both increasing gas mileage and decreasing greenhouse gas pollution for all new trucks and cars sold in the United States of America. And I want to...
(APPLAUSE)
I want to applaud the leadership of the folks at the Environmental Protection Agency, the Department of Transportation, and the White House Office of Energy and Climate Change who have worked around the clock on this proposal, which is has now been embraced by so many.
Now, in the past, an agreement such as this would have been considered impossible. It's no secret that these are folks who occasionally have been at odds for years, even decades. In fact, some of the groups here have been embroiled in lawsuits against one another. So that gives you a sense of how impressive and significant it is that these leaders from across the country are willing to set aside the past for the sake of the future.
For what everyone here believes, even as views differ on many important issues, is that the status quo is no longer acceptable. While the United States makes up less than five percent of the world's population, we create roughly a quarter of the world's demand for oil.
And this appetite comes at a tremendous price, the price measured by our vulnerability to volatile oil markets, which send gas prices soaring and families scrambling. It's measured by a trade deficit where as much as 20 percent that we spend on imports is spent on oil. It's measured in billions of dollars sent to oil exporting nations, many that we do not choose to support if we had a choice. It's measured in a changing climate as sea levels rise and droughts spread, forests burn and storms rage.
And what is all the more tragic is that we've known about these costs in one way or another since the gas shortages of the 1970s. And yet, all too little has been done.
Calls for action rise and fall with the price of a barrel of oil. Worn arguments are traded across entrenched divides. Urgency fades, complacency grows, and time passes.
As a result, we have done little to increase the fuel efficiency of America's cars and trucks four decades. Think about this -- consider how much has changed all around us.
Think of how much faster our computers have become. Think about how much more productive our workers are. Think about how everything has been transformed by our capacity to see the world as it is, but also to imagine a world as it could be.
And that's what's been missing in this debate for too long. And that's why this announcement is so important, for it represents not only a change in policy in Washington, but the harbinger of a change in the way business is done in Washington.
No longer will we accept the notion that our politics are too small, our nation too divided, our people too weary of broken promises and lost opportunities to take up an historic calling. No longer will we accept anything less than a common effort made in good faith to solve our toughest problems. And that is what this agreement seeks to achieve.
Right now, the rules governor fuel economy in this country are inadequate, uncertain, and in flux.
First, there is the standard for fuel economy administered by the Department of Transportation. On top of that, the Environmental Protection Agency, in response to a decision by the Supreme Court, may have to set limits on greenhouse gas emissions from vehicles, establishing another standard. California has sought permission under the Clean Air Act to require that vehicles sold in California meet yet another even stricter emission rule. And 13 states and the District of Columbia have agreed to adopt California greenhouse gas reductions if the permission, called a waiver, is granted.
Now, car companies might then face three different sets of overlapping requirements. One administered by the Department of Transportation. One administered by the EPA. And still a third administered by California and 13 other states.
This proposed national policy, under the leadership of two agencies, and bringing together 14 states, 10 companies, as well as autoworkers and environmental groups, changes all that. The goal is to set one national standard that will rapidly increase fuel efficiency without compromising safety by an average of 5 percent each year between 2012 and 2016, building on the 2011 standard my administration set shortly after taking office.
A series of major lawsuits will be dropped in support of this new national standard. The state of California has also agreed to support this standard and I want to applaud California, and Governor Schwarzenegger, and the entire California delegation for their extraordinary leadership. They have led the way on this, as they have in so many other efforts, to protect the environment.
In addition, because the Department of Transportation and EPA will adopt the same rule, we will avoid an inefficient and ineffective system of regulations that separately govern the fuel economy of autos and the carbon emissions they produce. And at a time of historic crisis in our auto industry, when domestic auto manufacturers are making painful choices and restructuring their businesses to be viable in the future, this rule provides the clear certainty that will allow these companies to plan for a future in which they are building the cars of the 21st century.
Yes, it costs money to develop these vehicles. But even as the price to build these cars and trucks goes up, the cost of driving these vehicles will go down as drivers save money at the pump. And this is a point I want to emphasize. If you buy a car, your investment in a more fuel efficient vehicle as a result of this standard will pay off in just three years. Three years time you will have paid off the additional investment required.
So this is a winning proposition for folks looking to buy a car. In fact, over the life of a vehicle, the typical driver would save about $2,800 by getting better gas mileage.
And the fact is, everyone wins. Consumers pay less for fuel, which means less money going overseas and more money to save or spend here at home. The economy, as a whole, runs more efficiently by using less oil and producing less pollution. And companies, like those here today, have new incentives to create the technologies and the jobs that will provide smarter ways to power our vehicles.
And that's why in the next five years we're seeking to raise fuel economy standards to an industry average of 35.5 miles per gallon in 2016. An increase of more than eight miles per gallon per vehicle. That's an unprecedented change, exceeding the demands of Congress and meeting the most stringent requirements sought by many of the environmental advocates represented here today.
As a result, we will save 1.8 billion barrels of oil over the lifetime of the vehicles sold in the next five years. Just to give you a sense of magnitude, that's more oil than we imported last year from Saudi Arabia, Venezuela, Libya, and Nigeria combined. Here's another way of looking at it. This is the projected equivalent of taking 58 million cars off the road for an entire year.
I also want to note that the agreement we've announced today is part of a far larger effort. In fact, on the other end of Pennsylvania Avenue, Henry Waxman is chairing a meeting of the Energy and Commerce Committee, which is working on an equally historic energy bill that will not only help our dependence on foreign oil, prevent the worst consequence of climate change and build a clean energy economy, but will provide more than $15 billion to help build the cars and trucks of the future right here in America.
And the recovery plan we've put in place, as well as the budget that builds on it, makes historic investments in a clean energy economy, doubling our capacity to generate renewable energy like wind and solar, investing in new battery technologies for plug-in hybrids and building a smarter, stronger grid on which the homes, businesses and vehicles of the future will run.
Now too often, lost in the back and forth of Washington politics, absent in arguments were the facts opponents used to pin on the conclusions they've already reached, absent all that is this. Ending our dependence on oil. Indeed, ending our dependence on fossil fuels represents perhaps the most difficult challenge we have ever faced. Not as a party, not as a set of separate interests, but as a people.
We have, over the course of decades, slowly built an economy that runs on oil. It has given us much of what we have for good, but also for ill. It has transformed the way we live and work, but it's also wreaked havoc on our climate. It has helped create gains in prosperity unprecedented in history, but it also places our future in jeopardy.
Ending this dependence will take time. It will take an incredible effort. It will take an historic investment in innovation. But more than anything, it will take a willingness to look past our differences, to act in good faith, to refuse to continue the failures of the past and to take on this challenge together for the benefit not just of this generation, but generations to come.
All of the people who have gathered here today, all the auto executives, all our outstanding elected officials and appointees, Ron Gettelfinger, members of Congress, governors, all these folks here today have demonstrated that this kind of common effort is possible. They have created the template for more progress in the months and years to come. Everything is possible when we're working together. And we're off to a great start.
So, thank you, everybody. Appreciate it.
HARRIS: All right. Cleaner, more fuel efficient cars and trucks. That is the idea behind the new vehicle standards just announced by President Obama. Joining us now to drill down on what this means for you and for the industry, Lauren Fix.
Where are you, Lauren? Of Carco (ph). She is -- there she is -- a nationally recognized expert on the auto industry and she's joining us from Austin, Texas. Neal Boudette is the Detroit bureau chief for "The Wall Street Journal" and he is joining us from Ann Arbor, Michigan. And in New York, Peter Valdes-Dapena, who was with us just a moment ago, senior writer for cnnmoney.com.
And, boy, let me start with -- eny, meny, miny, mo. Neal, let me start with you.
These tougher standards as a national security argument breaking our dependency on foreign oil. Do you buy it?
NEAL BOUDETTE, WSJ DETROIT BUREAU CHIEF: Well, yes. Sure. I think people have been talking about that for several years, that we import a lot of foreign oil. We import this foreign oil from places like the Middle East, that give us trouble. And if we can reduce oil imports, that's a good thing.
But in the grand scale of things, improving fuel economy for cars is only one piece of what you need to do for reducing imports of foreign oil. So it's got to be coupled with a whole comprehensive energy policy, not just an auto industry policy.
HARRIS: Wow. Lauren, it makes it a little more difficult to argue, I need my big SUV when the president is framing this choice as a national security decision.
LAUREN FIX, AUTOMOTIVE ANALYST: Well, I don't know about a national security decision. Yes, we all want better fuel economy, less greenhouse gases and lower prices of gasoline. Who's going to say no to that? I don't think there is anybody out there who wants that. However, there is always a cost. And then there's those underlying costs. It's going to cost consumers -- and I have calculated about $1, 300 more per car. That's a lot more than the $600 that they've been stating in the past.
HARRIS: Well, the president says it pays for itself in three years.
FIX: I was figuring that out as quick as I could. If gas stays about $2 and change her gallon. But they're talking about possibly -- and they've been talking about this for years -- putting an extra tax on gasoline. If they bring it up to $5 a gallon, we're all going to be forced to get better fuel economy cars and they're going to be deciding what cars we're going to buy next.
I'm really concerned when the government starts getting too deep into the auto industry. I think it's a great agreement, that they've got everyone working together, all of the manufacturers and the UAW. But when consumers are going to be told, you know, the price of gas is probably going to go up, so you're probably going to have to buy this. The bigger thing is, that there's about $1.4 billion in expenses for all this R&D to make this happen by the deadline, to make 35 miles to the gallon. And I don't believe the car industry is that solvent right now, shall we say.
HARRIS: Wow. All right. Peter, your body language suggests that you want to jump in here. So go ahead.
VALDES-DAPENA: Well, I mean, there's a lot coming on here. I mean one thing about raising gas prices is that it is going to actually help auto manufacturing to reach these goals because auto consumers will become more interested in fuel economy.
One challenge with trying to set fuel economy for cars is, the consumer response is often, hey, the fuel economy on my SUV is actually much better than it used to be. I'm going to go buy that bigger vehicle now because it doesn't cost me the way it used to. It's not like customers just -- consumers just stay put in the face of this. They changed their choices. And if gas prices stay low, the consumer is going to start working against this plan by moving up to those, yes, more fuel efficient, large SUVs, but still the (INAUDIBLE) better (INAUDIBLE).
HARRIS: But they're not going to be on the road. I mean you can see a day -- I mean what am I missing here? It seems to me you can see a day when they're not going to be available. Yes, buy them now, hang on to them forever, but the industry is being reshaped. Am I wrong here? Neal? Lauren?
FIX: Well, I'm really concerned . . .
BOUDETTE: Well, I think the SUVs are not going to go away completely because there are people who need SUVs and will continue to buy them. I think the real key to making this whole thing work is gas prices. And the administration is basing this on an estimate that gasoline will cost $3.50 by 2016.
And people around the industry will tell you that they think $4.00 a gallon is a good place to start for how much gas should cost if you want to get people to buy small, fuel efficient cars. I would bet that down the road, and once we're beyond this recession, that there is some talk about increasing gas taxes to help make it more palatable for consumers to buy these cars.
HARRIS: Go ahead, Lauren.
FIX: OK. Yes, I'm all fired up here because I know how you can save on greenhouse gases and fuel economy today and that's what I've been saying for the last 20 years and that is, do your basic maintenance on your car. I could sell you a car that gets 35 miles to the gallon, but if you're not going to change the oil, check the tire pressure or even bother taking it to a technician, there your -- there's $62 billion in undone maintenance and that's really affected greenhouse gases.
That's why I'm against this Cash for Clunkers law. There's so much going on that consumers don't want to put their efforts in. They want a car they can drive that doesn't have to be maintained. You want to improve your fuel economy? Do your basic maintenance. I mean that's pretty obvious. And if people did that, like President Obama had actually said during his campaign, people maybe had thought that was a joke, but you can actually help greenhouse gases, improve your fuel economy and get more out of your vehicle. HARRIS: But it's not enough. The president is suggesting here that -- Peter, the president is suggesting it's not enough. We need to move more aggressively. And the real question I -- one of the questions is, is do you believe, in the final analysis, that enough lead time is being provided here for this industry to make the changes that are being asked of it?
VALDES-DAPENA: Well, that's a -- you know, that's a tough question whether that lead time is there. One assumes -- I mean that industry sources that I've talked to, they seem to all support this bill. They seem to believe they have the technology to do this. And, remember, they don't have to start off at 35.5 miles a gallon right away. They can get there over a period of time.
And part of this also is that every manufacturer has its own set goal. So a full line manufacturer, like a General Motors or a Toyota that does make large trucks and SUVs, will be asked for a different goal than, for example, a Honda that makes only smaller cars and vehicles. So they each have -- there's some flexibility there within that as long as the total goal adds up to ultimately 35.5 miles per gallon. So there is some flexibility here.
And there are some technologies on the way that are going to help the averages out a lot. I mean Chevy's working on the Chevy Volt. Ford is working on an electric Ford Focus. They may not sell a ton of them, but each of those vehicles is going to get fuel economy rated in triple digits. That will help the (INAUDIBLE).
HARRIS: Peter, let me shut you down because Lauren is so fired up here. But I've got to go. Neal, let me give you the last word. Anything you want to add to this before we go?
BOUDETTE: Well, I would say that I think the -- this is a stretch for the industry, but it's not impossible. They do have 6.5 years to get to 2016 to do this. And, you know, it generally takes about three years to develop a new model from scratch and they have a lot of high efficiency vehicles in the pipeline. The Chevy Volt is an electric car that's coming out in about a year or so. So I think the industry has a shot at doing this.
HARRIS: OK. I can't resist. Lauren, what did you want to say?
FIX: Well, I was going to say, we all pushed for hydrogen cars and, I'll tell you what, GM and Ford all did come up with a hydrogen car to test and it is being tested. But now we're being told it's being shelved. It's sort of like ethanol gas. They have everyone running in every direction. What are we doing? Ethanol. And everyone builds ethanol plants and now there are ethanol plants that aren't even being used right now. They're just totally dead. And we've switched all our fields over to corn. Now we did the same thing with hydrogen. We can't keep changing. We need an energy policy that has a direction and sticks with that direction.
HARRIS: All right, Lauren, appreciate it. Neal, appreciate it. And, Peter, as always thanks for your help. Still to come in the NEWSROOM, a teacher and teacher's aide arrested and charged with taping a student to a chair. What happens when teachers go too far to maintain discipline in the classroom.
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HARRIS: All right. Let's get back to the White House now. You just heard the president's statement on stricter standards for cars and vehicles. Governor Schwarzenegger was there and here he is now.
GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: The skills that he has displayed in bring all the stake holders together so to create a victory not only for California, but for the United States, and for the state of Massachusetts, for the autoworkers, for the auto manufacturers, for the environmentalists, for EPA, the federal government. He brought everyone together and now we created one standard, which is going to help everybody.
We are very happy that this has happened because it means a reduction of one-third of greenhouse gases and one-third of oil consumption. As you've heard the president say, this is, you know, reducing oil consumption by 1.8 billion gallons of oil. So this is staggering. As I said, it's an equivalent of taking 55 million cars off the road.
And this is exactly what it's all about. All of us working together, showing great leadership and reducing the consumption of oil, reducing our greenhouse gases and fighting together global warming.
And so I want to congratulate the president because three, four other administrations previously have tried to do that and were not successful. There was a lot of dialogue about reducing greenhouse gases and making the cars more efficient, but no action. So this president, after 120 days in office, has created the action and brought everyone together. So we are ecstatic about this great progress and I'm happy that, you know, Fran Poferty (ph) has created this bill to reduce the tail pipe emissions in 2002 and that we could lead and have 15 other states follow us and now the federal government follow California.
With that, I want to hand the microphone over to Governor Patrick (ph), who has been also a terrific leader and very (INAUDIBLE).
HARRIS: And at that moment -- at this moment we will leave.
The president announcing just a short time ago, you heard it right here in the CNN NEWSROOM, stricter standards for vehicle emissions and mileage. And Governor Schwarzenegger from California touting the fact that the auto industry now has one standard, one playbook to work from. Governor Schwarzenegger from California.
The use of seclusion and restraints in schools, that is the focus of a hearing on Capitol Hill right now. The House Education and Labor Committee discussing findings that teachers nationwide often use restraints on special needs students. A report done by the Government Accountability Office. Case in point right here in the Atlanta area.
Officials yesterday arrested a high school teacher and her aide. They're accused of duct taping an autistic student to a chair last year, allegedly leaving him there for 15 minutes or more. The investigation turned up an allegation that the teacher also confined another student under a desk. Parents, shocked.
(BEGIN VIDEO CLIP)
GINA BRYAN, NEIGHBOR: To entrust your children to these teachers and then take advantage of them this way is just devastating.
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HARRIS: A CNN Special Investigations Unit has been looking into this problem for some time now. SIU's Abbie Boudreau joining me live with her findings.
What have you found, Abbie?
ABBIE BOUDREAU, SPECIAL INVESTIGATIONS UNIT: Well, what we're hearing from Capitol Hill today is consistent with many of the stories we've heard from parents throughout the whole country. What's grabbed the attention of Congress are those reports of deaths and injuries. And while those are rare, incidents of humiliation, isolation and emotional abuse are all too common.
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BOUDREAU, (voice-over): This is Garrett Peck. He's one of 6.5 million special needs children in U.S. public schools. He's eight years old, loves animals and has autism. Children like Garrett have become the subject of an intense debate over how public schools manage special needs children. House Education Committee Chairman George Miller says tougher laws are need.
REP. GEORGE MILLER (D-CA), EDUCATION CHAIRMAN: Very often, special needs children are subjected to policies of seclusion and policies of restraint that have, in fact, turned out to be lethal in a number of instances. Children have died at the hands of the people who are supposed to be taking care of them in the public school system.
BOUDREAU: GAO also investigated the misuse of time-out, which is supposed to be used to refocus a child, but is often used as a punishment. That's what happened to Garrett, according to the Utah Department of Human Services. Garrett's mother picked him up early one day from school. But she didn't see him in class. So she asked the teacher where he was. Garrett was put in this three sided cubical in the corner of the room.
BECCA PECK, MOTHER OF CHILD WITH AUTISM: And I just heard Garrett say, I want my mom. And he walked out around that corner and he was covered in marker on his eyelids, on his hair, face, clothes, legs, arms, everything. BOUDREAU: A report by Utah's Department of Child and Family Services found that Garrett, who was then just seven years old, had been in time-out for a minimum of two-and-a-half hours.
B. PECK: What was he thinking? Why is my mom letting this person do this to me? Why am I here? I mean, I -- I mean I trust no one now. And now I question everybody.
JOSHUA PECK, FATHER OF CHILD WITH AUTISM: Yes, we felt that it was so sad that -- we felt it was a form of torture to him, that he, being autistic, he had no way to express it. No way to tell.
BOUDREAU: CFS found the teacher had caused Garrett emotional maltreatment. His school district would not comment because the finding has now been appealed to juvenile court, but the district did confirm the teacher is still working.
(END VIDEOTAPE)
BOUDREAU: Congress is looking at implementing some basic safeguards to protect special needs kids like Garrett, who you just saw. Experts in the field say strong federal rules are long overdue.
HARRIS: And you're going to continue to follow this, Abbie?
BOUDREAU: Absolutely.
HARRIS: All right. Appreciate it. Thank you, Abbie.
BOUDREAU: Thanks.
HARRIS: President Obama is running into opposition from a surprising source in his efforts to close down the facility at Guantanamo Bay.
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HARRIS: Live Senate voting going on right now. Let's tell you what's going on here. A bill before the Senate right now could make it harder for your credit card companies to raise your interest rate. The legislation would require a 45-day notice before a rate increase. A consumer would have to be 60 days behind on their payments before the company would raise or could raise the interest rate on their balance. The bill would also prohibit some fees and set a minimum age requirement. The banking industry warns the new restrictions could actually hurt consumers by limiting access to credit. And once again, a live picture now. The Senate is voting right now.
A developing story on Capitol Hill. CNN has learned Senate Democrats will pull money for closing Guantanamo Bay Prison from a war funding bill. The bill included $80 million to begin shutting down the military prison. But Democrats were under fire from Republicans. They say it would be reckless to close the prison before deciding where to send the terror suspects detained there. The new language in the bill says no money will be approved until 60 days after the president submits a plan to Congress to close the prison. You know, he sits in a big green leather chair and he demands -- he says, order, order, a lot. He even decides who gets to speak. The speaker of Britain's house of commons, Michael Martin, quit today. Many members of parliament thought he was standing in the way of a scandal investigation. Some lawmakers are accused of charging outrageous items to their government expense accounts, like bathrobes, big screen TVs, porn videos, even clearing a castle mote. All this during a deep recession. Top that, Washington. No, no, don't. No, no, no, don't top that.
All right. Don't forget to check out my blog. Let's show the page, can we. Here's what you do. You go -- oh, what a handsome young fellow there. Just go to cnn.com/newsroom and click on my big dome there. CNN NEWSROOM continues right now with Kyra Phillips.
