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Loans to Help Automakers Go Green

Congress should fully fund the direct loans under the Advanced Technology Vehicles Manufacturing Incentive Program to assist auto companies and their suppliers with the transition to fuel-efficient vehicle production.

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The continuing resolution to fund the federal government for fiscal year 2009 includes funding for low-interest direct loans to automakers and suppliers. These loans are critical to preserving our domestic manufacturing base, and would assist automakers with the costs of retooling their facilities to produce significantly more fuel-efficient vehicles and components.

The Energy Security and Independence Act of 2007 authorizes such direct loans. This provision was designed as an incentive for these companies to accelerate the transformation of their U.S. factories to produce the next generation of fuel-efficient cars and trucks. At the same time, Congress must ensure that these new vehicles meet environmental targets, and that companies who receive the loans are held accountable should they fail to meet them.

The record oil and gasoline prices of 2008, combined with more evidence of global warming, reinforce the urgency to slash oil use to protect our economy, security, and environment. The most important steps toward achieving these goals are to dramatically improve motor vehicle fuel economy, while developing the next generation of super-efficient vehicles such as plug-in hybrid electric vehicles that get 100 miles per gallon or more. Congress should fully fund the direct loans under the Advanced Technology Vehicles Manufacturing Incentive Program to assist auto companies and their suppliers with this essential transition.

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