Budget Boost for Car Safety Agency Stalls

December 22, 2010

The U.S. auto safety agency will get no new help next year despite a widespread belief in Congress during the Toyota Motor Corp. recalls that sharper legal teeth and more money were urgently needed.

Proposals to boost the National Highway Traffic Safety Administration’s enforcement budget and safety legislation got off to a promising start — but stalled amid shifting political priorities, partisan wrangling and fading headlines.

Prospects for both initiatives fizzled in the waning days of Congress, leaving the agency with no new leverage and only piecemeal appropriations. Lawmakers are working on a short-term extension of government funding through March, but there is no budget beyond that timeframe.

“It’s incredibly discouraging,” said Jackie Gillan, vice president of Advocates for Highway and Auto Safety. “After all these hearings on Toyota and the NHTSA budget being inadequate for motor vehicle safety, we’re at a point where it could turn out to be less.”

Gillan, whose organization lobbies for federal and state safety laws and is backed by consumer, safety and health groups as well as insurance companies, said the safety measures now in limbo “would have been a huge step forward.”

According to budget figures, auto companies can for now plan on a level of safety regulation similar to recent years, when annual enforcement spending totaled about $18 million, and NHTSA was criticized for being inconsistent at best and lax at worst.

Carmakers have also outlasted Democratic leaders in the House who led the charge for boosting NHTSA’s authority, its budget and a range of measures to hold industry more accountable on safety.

“We have short memories,” said Bill Visnic, senior editor of Edmunds AutoObserver.com. “The public consciousness and political priorities have shifted and moved on from that (Toyota) drama.”

The incoming Republican House leadership is expected to go easier on corporations in general, good news for investors who also value a more predictable regulatory outlook.

Moreover, the incoming chairman of the Energy and Commerce Committee, where the safety bill originated in the House, is Republican Fred Upton. He is from Michigan, which is home to the resurgent U.S. auto industry.

Big automakers, through their trade group, said they are moving forward with safety initiatives on their own, and are more frequently out in front of regulators on recalls and more accurately pinpointing problems. NHTSA rarely forces a recall; instead it pressures companies to take that step through defect investigations.

In the aftermath of Toyota — which was fined nearly $50 million for allegedly dragging its feet in three major recalls, two of which involved unintended acceleration — NHTSA received a small boost from stimulus funding. It also overhauled the top of its enforcement unit and picked up the pace of defect reviews. Recalls swiftly followed, in some instances.

Overall recalls totaled more than 14 million cars and trucks through mid December and were tracking the annual average of 15 million between 2005-09, according to a Reuters analysis of safety data.

Toyota accounted for more than a third of the recall total so far this year followed by General Motors Co.; Honda Motor Co. Ltd ; Chrysler Group LLC, which is run by Fiat SpA, Nissan Motor Co. Ltd , and Ford Motor Co., NHTSA figures show.

NHTSA is also expected in early 2011 to wrap up its latest investigation of Toyota, which was spurred by complaints that the agency did not scrutinize the company enough in the years leading up to the big 2009/2010 recalls of 6.5 million vehicles over unintended acceleration.

Consumer complaints to NHTSA dating to 2000 allege dozens of fatalities in acceleration-related crashes of Toyota and Lexus vehicles. Toyota says its throttle systems are sound.

David Strickland, the NHTSA administrator, said that his agency expects to receive adequate funding from Congress, and that safety proposals could reappear in 2011.

“It wouldn’t surprise me,” he told reporters.

Other insiders have also said that safety provisions could find their way into long-term spending legislation for highway and transit construction programs. Work on that bill is expected to start early next year.

(Editing by Gerald E. McCormick)

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