The Problematic Budget Bill and Its Implications for Transportation

The big budget bill recently passed by the U.S. House of Representatives is causing significant controversy. Now under consideration by the Senate, this bill has serious implications. If enacted as-is, it could provide substantial tax cuts for the wealthiest Americans. Conversely, the poorest citizens may face cuts to vital food and healthcare aid. The Telemetry market research practice focuses on critical issues related to transportation and mobility. These sectors are also experiencing substantial changes that may harm the environment, public health, and road safety.

Freezing Emissions and Fuel Economy Standards

The Trump administration made it clear that it opposes regulations aimed at reducing fossil fuel use. In its first term, the administration attempted to revoke the Clean Air Act waiver for California. This waiver allowed the state to set stricter air quality standards and roll back fuel economy and CO2 emissions standards. The administration's approach involved regulatory processes requiring comprehensive cost-benefit analyses, but the execution was often superficial, leaving these efforts incomplete.

This time, the budget bill proposes repealing fuel economy and emissions standards through legislation. Specifically, it targets the standards established by the National Highway Traffic Safety Administration for model years 2024 to 2032, as well as greenhouse gas emissions standards set by the Environmental Protection Agency for the same period. The initial budget bill passed through the House on a strict party-line vote and is currently being reviewed by the Senate.

If this aspect of the bill passes, corporate average fuel economy (CAFE) standards would remain at 2023 levels. This freeze sets requirements at 43.7 mpg for passenger cars and 31.7 mpg for light trucks. The U.S. light vehicle fleet already ranks last in fuel efficiency among major markets. If automakers continue to build to these outdated standards, the U.S. market will fall significantly behind global competitors by 2030.

Additionally, a separate resolution was enacted to repeal California's waivers. These waivers enabled the state to require that all new vehicles sold from 2035 onwards must be zero-emission or partial zero-emission (like plug-in hybrids).

Interestingly, Stellantis is an automaker required to adhere to California's Zero Emission Vehicle (ZEV) standards for at least the next several years. Preceding CEO Carlos Tavares had a policy of not purchasing ZEV credits, but faced potential massive fines for 2023 compliance shortfalls. However, Stellantis signed a settlement agreement with California, allowing it to avoid fines, provided it meets ZEV mandates through 2030. This agreement will remain effective despite federal regulation changes, ensuring Stellantis continues its electric vehicle sales in California.

No AV Regulations for At Least a Decade

Another concerning budget provision has caught attention in technology media circles. In recent years, many states have moved to create legislation surrounding artificial intelligence (AI) systems. However, Section 43201 of the House budget bill imposes a ten-year hiatus on states enforcing laws or regulations pertaining to AI models, systems, or automated decision systems.

Automated Vehicles (AVs) depend heavily on AI for driving tasks such as acceleration, braking, and steering—making them automated decision systems. Currently, there aren't any regulations governing these systems at either state or federal levels in the U.S. While the bill doesn't explicitly mention AVs, it implies that states may not have the authority to regulate them beyond registration.

This situation raises significant safety concerns since there is currently no independent evidence proving AVs are safer than human drivers in similar conditions. Human drivers must complete written, visual, and practical tests to demonstrate licensing competence, a process managed at the state level.

Traditionally, the federal government oversees motor vehicle safety, including standards for braking, lighting, and occupant protection. However, despite over a decade of AV development, the NHTSA has not implemented regulations for these systems. Although some states could aim to create licensing standards for AVs, this budget bill could impede such initiatives.

Dr. Henry Liu, director of MCity at the University of Michigan, and his colleagues have proposed a safety testing framework for AVs to NHTSA. Given the Trump administration’s opposition to regulation, the chances of NHTSA instituting regulatory measures appear minimal. While ADS developers might voluntarily adopt these frameworks, that prospect seems unlikely. The best hope for an evaluation system may come from a third-party organization like the Insurance Institute for Highway Safety, which conducts independent crash tests.

The only viable pathway to ensuring AV safety on public roads may lie in product liability laws. However, the downside of this approach is that it often occurs after considerable safety failures and can become a lengthy and costly process for the public. Courts may also yield unpredictable results. Furthermore, many corporations utilize mandatory arbitration as part of their service terms, complicating victims' capacity to pursue legal claims.

A patchwork framework of state regulations is not ideal for businesses aiming for uniformity. However, in an environment where federal regulators are hesitant to act, states have become the most feasible avenue for regulation. It is disheartening that politicians who support state rights often oppose when states seek to implement regulations they disagree with, as is the case here.

Conclusion: The Future of Transportation Regulation

The implications of this budget bill could significantly reshape the future of transportation in the U.S. From emissions standards to automated vehicles, the outcomes may have lasting effects on public health and safety. As technology evolves, it is crucial that regulations adapt to ensure a safe and sustainable future for all road users. Without proactive measures, we risk falling behind global standards, compromising both environmental and public health initiatives.

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