White House Considers 'Decoupling' Bush Tax Cuts Ahead of Midterms

The White House is heading back to the drawing board to determine the fate of the Bush tax cuts, amid fears Congress will not approve a plan to hike taxes on the nation's wealthiest families if Republicans take an expected House majority in next Tuesday's election, The Washington Post reported Saturday.

The Obama administration is mulling a strategy that would break apart the Bush tax cuts, according to sources familiar with the matter. The plan would call for a permanent extension of cuts for families earning less than $250,000 a year, and a temporary extension of cuts on income above that level.

The proposed "decoupling" of tax provisions would delay a decision on cuts for the so-called "rich" until next year or the year after, the sources said.

Republican leaders have pushed to extend the Bush tax cuts, which expire in December, for all income brackets, while President Obama insists that the country cannot afford to keep tax breaks on income over $250,000 a year for families, or $200,000 for individuals.

Partisan haggling blocked a vote on the cuts before elections, but Congress is expected to take-up debate again in mid-November, most likely with a new Republican majority in the House and additional GOP seats in the Senate.

While preferring a permanent extension across income brackets, Republican leaders have said they would accept a two-year extension of all the cuts.

White House officials confirmed they were reviewing a strategy for the lame-duck legislative session but declined to comment on decoupling or other compromises such as backing tax breaks for the rich in exchange for Republican approval of additional stimulus.

American taxpayers could see increased rates reflected in their January paychecks if Congress does not approve an extension before the end of the year.

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U.S. Considers 62 MPG Goal for 2025 Autos

The new cars and trucks sold in 2025 may be required to average 62 miles per gallon as a group, far surpassing the fuel efficiency of current high-mileage stars like the Toyota Prius and Honda Civic hybrids.

The government on Friday presented the potential range it is considering for fuel efficiency standards for new cars and trucks starting in 2017.

The Transportation Department and Environmental Protection Agency said the fleet of new vehicles may need to meet a standard set somewhere from 47 mpg to 62 mpg by 2025. The mileage gains would be the equivalent of an annual decrease in carbon dioxide emissions per mile of 3 to 6 percent.

The new standards, while several years away, are closely watched by automakers who plan vehicle lineups years in advance, as well as environmental groups trying to curb oil dependence and reduce greenhouse gas emissions. President Barack Obama has pushed for tougher fuel efficiency standards and the rules could take on added significance if Congress is unable to pass energy legislation capping greenhouse gases blamed for global warming.

After little progress during the past three decades, rules adopted earlier this year will lift the new vehicle fleet average to 35.5 mpg by 2016, an increase of more than 40 percent over current standards. The administration's announcement Friday is just a beginning in the work on mileage standards for the 2017-2025 model years.

The government intends to issue a proposal in September 2011 and a final rule by late July 2012.

EPA Administrator Lisa P. Jackson said the next round of mileage standards "will accelerate the environmental benefits, health protections and clean technology advances over the long-term."

Transportation Secretary Ray LaHood said the administration needed to "keep the momentum going to make sure that all motor vehicles sold in America are realizing the best fuel economy and greenhouse gas reductions possible."

The fuel efficiency standards are designed to improve gas mileage across each automaker's lineup and across the nation's entire fleet of new vehicles. Vehicles must meet differing standards based on their dimensions. Compact cars must get better mileage than sport utility vehicles, for example, but requirements for all types will go up.

Environmentalists have sought requirements of at least 60 miles per gallon by 2025, arguing that more gas-electric hybrids, electric vehicles and cars and trucks with improved internal combustion engines and reduced weight could dramatically alter the fleet.

Governors from eight states -- New York, New Mexico, Maine, Oregon, Maryland, Pennsylvania, Massachusetts and Washington -- urged Obama in a letter Friday to set standards of 60 mpg by 2025.

Automakers have cautioned that pushing gas mileage standards up that quickly could force them to raise prices beyond the reach of many consumers.

The documents estimate that the toughest efficiency standards in the range being considered would add $2,800 to $3,500 to the price of each vehicle. But under that scenario, owners would recoup their investment in 3 to 4 years and save $5,700 to $7,400 over the lifetime of the vehicle.

If met, the targets would bring topflight fuel efficiency to a larger number of vehicles in 15 years. For example, a new Toyota Prius gets 50 mpg in city-highway driving combined and a Honda Civic hybrid garners 42 mpg in combined driving -- figures that would become more commonplace across the fleet.

Later this year, several automakers will begin releasing plug-in electric hybrids and electric cars. General Motors Co. is releasing the electric rechargeable Chevrolet Volt and Nissan Motor Co. begins selling the Nissan Leaf electric car, opening a new wave of mass-produced electric vehicle options.

The government's so-called "notice of intent" document gives an overview of the possible standards, describing the technologies that would be needed to achieve those goals. It seeks feedback from the public. The two federal agencies plan to issue a second "notice of intent" by Nov. 30 with an updated analysis of potential targets for the 2017-2025 period.

The government is also expected to soon release a proposal for first-ever fuel efficiency and emissions standards for medium-duty and heavy-duty trucks beginning with the 2014 model year.

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