A federal judge last week approved a $14.7 billion settlement to partially resolve the legal fallout over Volkswagen’s installation of “defeat devices” designed to cheat air quality rules in more than 500,000 vehicles sold in the US The complicated settlement resolves a number of legitimate claims, providing relief for car owners, the state of California and the Federal Trade Commission. But it also includes a dubious provision that Volkswagen invest $1.2 billion in a plan to be approved by the Environmental Protection Agency to promote “zero-emissions vehicle technology,” a euphemism for electric vehicle charging stations. This is an affront to both common sense and the Constitution.
According to the Justice Department, the $1.2 billion investment remedies Clean Air Act violations for “deceptive marketing.” But this is absurd. The Clean Air Act has nothing to do with the policing of false advertising, of which Volkswagen was guilty. That’s the job of the FTC, which is party to the settlement.
With no basis in existing law, the origins of the $1.2 billion “investment” can be found in a failed legislative proposal from the Obama administration. In his 2011 State of the Union address, President Obama promised to put one million electric vehicles on the road by 2015. To this end, the White House requested from Congress $300 million. Congress demurred.
In 2016 the president once more sought federal spending to support increased usage of zero-emissions vehicles through a program called the 21st Century Transportation Initiative. Again, Congress refused.
Having failed to persuade Congress, the administration now seeks to co-opt the judiciary’s injunctive and contempt powers in order to advance the president’s failed legislative agenda. The proposed consent decree would give the government authority over $1.2 billion in zero-emissions vehicle investments, which is four times what the administration unsuccessfully sought from Congress for effectively the same purpose in 2011.
If allowed to stand, the $1.2 billion electric-car money grab would provide a powerful model for future presidents to cut Congress out of the appropriations process. All future presidents would have to do is allocate resources into regulatory enforcement and then pursue settlements whereby the regulated entity “voluntarily” agrees to fund the president’s preferred policies.
The Volkswagen settlement includes a stipulation that would have allowed the court to remove the industrial-policy provision without altering the rest of the agreement, but the judge refused to exercise this authority. Because an appeal of the settlement’s approval appears unlikely, it is incumbent on Congress to defend against such blatant executive overreach. In September a bipartisan majority in the House of Representatives passed H.R. 5063, the Stop Settlement Slush Funds Act, which would rein in the president’s power to pursue failed legislative priorities through regulatory enforcement. In the name of constitutional order, the Senate should approve this worthy bill.