The House Energy and Commerce Committee has finished round one of its comprehensive energy legislation efforts. Unlike the Senate, the House version does not include an increase in CAFE standards, the national program for vehicle fuel efficiency.

Republicans pushed for improved CAFE standards, but Democrats defeated their efforts. Leading the charge was auto industry lobbyist veteran Michigan Democrat, Congressman John Dingell.

According to Reuters, in its current form the bill would:

require clothes washing machines, dishwashers, refrigerators and freezers to use less energy, and require more efficient light bulbs.

The bill would also provide government funding to develop plug-in electric vehicles and promote alternative fuels like ethanol.

Reg•Watch does not mean to discredit these valuable energy efficiency measures, but seriously? This is what we have waited six months for?

Speaker Pelosi promised this July 4 would be America's energy independence day. That clearly won't happen. Last November's sweeping Democratic victory is turning into a sweeping bore.

Pelosi claims to support the Senate's CAFE increase, and wants to see work on the legislation complete in both chambers by September. But this isn't good enough. The Senate's version contains a provision which would introduce cost-benefit analysis into the CAFE program for the first time. The provision could allow future administrations to block fuel efficiency increases by citing the cost to the auto industry.

If Speaker Pelosi and House Democrats want to make good on their campaign promises, they should pass strong CAFE legislation which recognizes the benefits of a cleaner environment, improved public health, and national security instead of the costs to Detroit.

You have likely read in your morning paper that late yesterday the Senate passed major energy legislation. News reports tout the accomplishments of Democrats in fending off industry influence and mandating an increase in CAFE standards — the national program regulating passenger vehicle fuel efficiency.

However, a damaging provision in the bill has remained under the radar. The Senate bill would require federal regulators to abide by a cost-benefit analysis before promulgating new fuel efficiency regulations. This is a substantial departure from the decades old CAFE program which, while outdated by current standards, recognized the crucial benefits of fuel efficiency regardless of costs.

OMB Watch reported on this issue in May. Find out more about the Senate's cost-benefit provision and the arguments against it:

Cost-Benefit Provision Latches onto Fuel Economy Standard

Yesterday, OMB Watch submitted comments on OMB's Draft 2007 Report to Congress on the Costs and Benefits of Federal Regulations. Congress has mandated OMB prepare this report each year.

OMB Watch's comments point out the process of aggregating costs and benefits is a waste of time producing largely meaningless results: "Aggregation is economically unsound, distorts the virtue of strong federal regulations, and does not provide practical utility for public policy."

The comments also include recommendations for improving the transparency of the federal regulatory process. To read OMB Watch's comments, click here.

Even when costs and benefits are not aggregated, cost-benefit analysis is a flawed process and often provides little utility to policy makers. Highlighting the problems with cost-benefit analysis is an article by Bloomberg news columnist Cindy Skrzycki published today. Check it out:

Cost-Benefit Analysis Often Just Doesn't Add Up [Bloomberg]