End Fuel Economy Rules for Cars, Bush Panel Urges

A task force on governmental regulations chaired by Vice President George Bush today proposed abolishing U.S. fuel economy standards, saying they are crimping the ability of domestic auto makers to respond to market demands.

The Presidential Task Force on Regulatory Relief, re-established by President Reagan on Dec. 15 to review federal regulatory programs, also recommended shutting down the Interstate Commerce Commission and presented a formal list of regulatory changes for the banking industry.

Members of the task force include Atty. Gen. Edwin Meese III, Commerce Secretary Malcolm Baldrige, Budget Director James C. Miller III and Beryl W. Sprinkel, chairman of the Council of Economic Advisors.

Standards Reviewed

The group quickly took aim at the Corporate Average Fuel Economy Standards, passed during the oil crisis of the 1970s when gas prices were being regulated by the government. The law requires auto makers to meet rigid fuel efficiency standards or face fines.

But since the price of oil is no longer being regulated in the United States, the strict fuel economy standards are squeezing domestic manufacturers out of the “muscle car” market, which has surged as oil prices have fallen, said the the vice president’s counsel, C. Boyden Gray.

“Automobile companies cannot produce the kinds of cars that a portion of the public wants--big station wagons, for instance,” without facing fines, Gray said after the task force’s first meeting at the White House.

If the government standards are not met, auto makers must pay $5 per car for each one-tenth of a mile over the limit, Gray said. Cars manufactured 25% or more out of the country, however, are not required to meet the rigid standards, he said.