Sen. Barack Obama (D-IL) wants to exchange automakers' retiree heathcare costs for improving fuel efficiency.

In a speech before Georgetown University, Obama says other steps are also needed, such as raising CAFE standards by three percent each year for the next 12 years. That would mandate passenger vehicles averaging 44mpg in 2020. Other initiatives include federal funding to encourage flex-fuel vehicles and to require all government-owned vehicles be flex-fuel capable. Lot of corn in Illinois, right?

Automakers have long stressed that they are at a disadvantage to many import companies from countries that subsidize healthcare costs. Obama's idea is worth considering if it doesn't lead to long-term obligations.

[Source: Georgetown University]

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