markable things that can happen, and the news over these past several months at our halfway point of our work with the automobile industry give us an enormous excitement about what advances in science and the technology that can emerge can do, and this will affect not only our whole transportation system-things such as hybrid vehicles and fuel sales-but it will also, I feel, dramatically affect the way we produce electricity, for example. It will have ubiquitous impacts on our economy.

So, I do feel very optimistic and, of course, I come out of science, but I am constantly reminded of what high challenges can do in that community of science and engineering in terms of innovation and lower cost ways of getting to our goals.

Mr. GORDON. Thank you, Dr. Gibbons. If there's any time left, I'd like for anyone else on the panel that might have any kind of thoughts on how these new announcements by the automobiles manufacturers might impact earlier estimates of mitigation.

Dr. MONIZ. Okay, I'll make one comment from the Department's perspective. Certainly, as Dr. Gibbons noted, the halfway point of the program has helped stimulate these very interesting proposals from Detroit, but I would just add with introduction of modelscertainly much earlier than expected-but I want to add that there still is a need for this very strong technology program to reach the full goal plan for 2004. Just as one example, research on fuel cell stacks will be proposed which will be a major push towards the 80mile per hour cost effective car.

Chairman SENSENBRENNER. The gentleman's time has expired. The gentleman from New York, Mr. Boehlert.

Mr. BOEHLERT. Thank you very much, Mr. Chairman, and let me say at the outset that I agree with your expressed concern that the budget is sort of built like a house of cards, and a large share of that is dependent upon the tobacco settlement which we all know is very controversial, and that concerns me, and I want to deal with real money, because I think the programs being advanced here represent exciting initiatives and some promise for the future, and it's up to us to find that real money and not the illusionary money that the Chairman referred to.

PROMOTION OF ALTERNATIVE VEHICLES

Mr. BOEHLERT. Let me get to some specifics, particularly for Dr. Moniz. I'm especially interested in encouraging the development of a market in alternative vehicles, particularly electric and hybrid electric, both for mass transit and individual use. To what extent will your initiatives promote these technologies, for openers? And to what extent do you expect the market for these vehicles to develop over the next several years? Let's take them one at a time. Dr. MONIZ. May I make a prologue on your opening, Congressman Boehlert, just to note that, at least in my understanding-I'm far from an expert in this-that the projections in the budget would be a nearly $10 billion surplus with the tobacco tax, and if the settlements are not in place, there would still be a surplus, so I think the prioritization is still there, but there still would be a budget surplus in my understanding.

With regard to the PNGV, indeed, in the budget there is a re

that is precisely to advance a set of new technology initiatives. I mention, for example, this critical issue in terms of reducing costs in the fuel cell stack. Having said that, however, I'd also like to add that that is following a down select in terms of learning over 5 years and narrowing technology options with the Big 3 partners. So, it's a disciplined process pursuing the important R&D on the most important questions.

With regard to the market penetration, if you permit, perhaps, Gary Bachula from Commerce might be better suited to answer that question.

Mr. BOEHLERT. Fine.

Dr. MONIZ. Thank you.

Mr. BACHULA. Sir, the Partnership for a New Generation of Vehicles project is designed to produce three production prototype automobiles by the Year 2004 that, essentially, are sort of like your standard Taurus or Concord or Lumina; 6 passengers; 0 to 60 in 12 seconds; trunk space; it's a car like you're familiar with, but we'd get 80 miles per gallon. Now, if it gets 80 miles per gallon, that means it's going to reduce greenhouse gas emissions by twothirds. It will be making a significant contribution to solving this overall problem. Transportation counts for about a third of the greenhouse gases put into the atmosphere; automobiles are, perhaps, about half of that. But we believe that this partnership which is aiming towards hybrid vehicles, fuel cells, technologies that are extremely advanced is already making a major contribution to this and can.

Now, what the Administration has proposed in this new budget is to add tax incentives, tax cuts, essentially, to people who would buy these kinds of new cars.

Mr. BOEHLERT. All right, before we get to that, let me you mentioned multiple agencies. Where is the coordination coming from? Mr. BACHULA. This is a partnership. It is a partnership between the Big Three, suppliers and a number of universities and so, and 5 federal agencies, 19 separate federal labs. We coordinate the effort in a secretariat in the Department of Commerce, but we work very closely with EPA; with the Department of Energy; with the National Science Foundation. We have a mechanism that is working extremely well.

Mr. BOEHLERT. Good, but what so often happens is that people out there across America are perplexed-you know, you hear about multiple agencies and crossing over several departments, but the coordinating agency is Commerce?

Mr. BACHULA. We manage the secretariat and chair the interagency committee, but this is very much a partnership, and the Department of Energy has the largest part.

Mr. BOEHLERT. You've convinced me that it's a partnership, and I'm very happy about that, but if I want to go direct questions to one specific source, that source would be Commerce?

Mr. BACHULA. Send them to me and we'll answer them. [Laughter.]

EFFECTIVENESS OF TAX CREDITS

Mr. BOEHLERT. Okay, fine. Now, you mentioned the tax credits.

of innovative technologies? What experience do we have to point to with, hopefully, pride?

Mr. BACHULA. Obviously, the tax credit will be a value if the price to the consumer minus the tax credit is attractive in terms of the alternatives, and right now, for example, with these advanced cars we're skating towards where we think the hockey puck will be. There aren't cars that meet these standards right now that can be produced for this price, but at the rate of improvement that is taking place in the design and in the research, we believe they will be there early in the next century.

POTENTIAL OF HYBRID AND ELECTRIC VEHICLES

Mr. BOEHLERT. All right. Finally, the last question-my time is up; I know it, and before the Chairman gavels me as an inducement to more people getting into R&D in this business-hold that gavel up

[Laughter.]

Mr. BOEHLERT. What's your forecast as to the look to the future? I mean, are we investing wisely if we can, for example, increase the range which is a real problem with the hybrid and the electric vehicles? As you look ahead to the market potential, do you see it there? Is it something that's real?

Mr. BACHULA. The goal of this car is to be very much like a car that most consumers are familiar with except under the hood it's going to be dramatically different. It's going to cost about the same; it's going to be comfortable; it's six passengers. This is a car that looks like today's car but operates very, very differently and would be priced comparatively. If we can do all that-and we don't yet know how to do all of that—but if we can do all of that, yes, I think people will buy them.

Chairman SENSENBRENNER. The gentleman's time has expired. The gentlewoman from Michigan, Ms. Rivers.

Mr. BOEHLERT. I was going to yield back the balance of my time, Mr. Chairman.

[Laughter.]

Chairman SENSENBRENNER. Well, you're currently in the hole like the budget is, so it's

[Laughter.]

Chairman SENSENBRENNER. The gentlewoman from Michigan.

COMPARISON OF U.S. AND FOREIGN INCENTIVES FOR AUTOMOBILES

Ms. RIVERS. Thank you, Mr. Chairman. A previous speaker mentioned that this debate should be centered around real money, and I agree, but the real money I'm concerned about are the paychecks that go to the hundred thousand plus constituents in my district who make automobiles, and I was very dismayed last night to turn on, I believe it was NBC, and see a very interesting story on Toyota's Prius car which they are moving ahead very quickly with. It comes as close to a perpetual machine than anything I've seen developed, and it's a very frightening thing for somebody who represents a district where making automobiles is what we do and what we do very well.

I'm also very distressed when I see New Technology Week saying

it certainly seems to me that the way people, like my constituents, are going to be protected and are going to be able to maintain their quality of life is to get ahead of this game technologically. So, one of the things I would like to know about is-and I would put this to Mr. Bachula and to Dr. Moniz but others may speak to it-I would like to know in terms of private, public partnerships, tax incentives, governmental activities in general, how the United States compares to our worldwide competitors? How are we doing in terms of advancing this technology through a partnership here in the United States relative to Japan to any of the other countries where they are competing with us, because I'm concerned. This was not a happy story for me to see on TV last night. Mr. Bachula?

Mr. BACHULA. Ms. Rivers, the story which you saw on CBS last night has part two and that's tonight, and that's going to tell you what the big three are doing here in this country.

Ms. RIVERS. Good. I look forward to it.

Mr. BACHULA. And that story, I think, is going to be a good one and an exciting to you and your constituents. The Partnership for a New Generation of Vehicles was announced in September of 1993 by President Clinton, Vice President Gore, and the CEOs of the big three. It was about 3 months later, according to Time Magazine, that Toyota ordered its research team to start developing what we now know as the Prius.

So, it was the American partnership in the research program that sort of generated this international competition. Now, it's coming back to us, and I think it will probably spur even faster movement than we had originally predicted to bringing these cars to market.

Other nations are very competitive with us, but they are not ahead of us in advanced technologies. The research that has gone on that we're aware of; that we know of, and some, of course, is proprietary, is going to produce a car that is very unlike your father's Oldsmobile, but it is going to look and feel and be as comfortable; it's going to be as safe; it's going to be clean; it's going to accelerate 0 to 60 in 12 seconds; it's going to have luggage room, but underneath that hood you're going to have new lightweight materials, hybrid engines, power electronics, and a lot of really neat technologies that were started in Energy Department labs and the big three are now using to make cars.

Ms. RIVERS. And I appreciate all of that. My question, though, really is around as our role here is in government-as a government, are we giving our manufacturers and our workers the same sort of help that our competitors are giving theirs? That's really my question. Or are we, for whatever reason, saying our competitors are getting all this help, but we're not going to do it? Are we keeping up in terms of the help that we're offering our industry with what our competitors are offering theirs?

Mr. BACHULA. I believe we are. Now, it is possible there is some evidence that the Prius which is on the road in Japan right now is getting a subsidy. It cost them about $36,000 to make them, and they're selling it for $17,000. One possible way to compete with them is just buy them all.

Chairman SENSENBRENNER. All those in favor of authorizing funds for this purpose will say aye.

[Laughter.]

Ms. RIVERS. Before I hear from Dr. Moniz I have to comment that there was a certain irony to me to find out that the engineer in charge of the Prius project was formerly from GM and was hired by Toyota to do this work. Dr. Moniz?

Dr. MONIZ. Well, I don't have too much to add to Gary's statement. I was going to note that there was a very large subsidy in the Prius, and I would not characterize their development as being ahead of ours technically. I believe we are supplying the right kind of help through partnership with our companies. It may be different in form than the Japanese system, but we are emphasizing partnership, essentially, industry consortium. We are trying to emphasize the competitive kinds of technology developments as reflected in the rather different announcements made by our big three in the last auto show. But I think it's aggressive. I would also add that the fact that the demand for the Prius has sort of been twice that expected by Toyota indicates the desire, I think, for the consumers to have this kind of product. In fact, it reminds me of a statement made in different context by John Brown, the CEO of British Petroleum. He stated that the people want, in this case, energy at a good price. They also want to protect the environment, and a good businessman knows to give customers what he wants. Chairman SENSENBRENNER. The gentlewoman's time has expired.

Ms. RIVERS. Thank you, Mr. Chairman.

Chairman SENSENBRENNER. The gentleman from Pennsylvania, Mr. English.

EFFICIENCY OF TAX PROPOSALS

Mr. ENGLISH. Thank you, Mr. Chairman, and I'd like to welcome the panel. I've been reviewing your testimony, and I'm intrigued by a couple of things. The proposal that the Administration is putting before this Committee seems to be an odd collection of things a group of interesting research proposals and a dog's breakfast of tax initiatives which representing the Ways and Means Committee. I'm not sure that there's much to be said for them from the standpoint of tax simplification, but I'd like to dig into them a little bit.

Dr. Gibbons, have you worked with the Treasury at all to assess the efficiency of the tax proposals that are being offered here? Dr. GIBBONS. They were developed at the Treasury Department. I'm not an economist, sir.

EXISTING TAX INCENTIVES FOR WIND AND BIOMASS

Mr. ENGLISH. I thought I saw their fingerprints on them. Do you have a sense-I guess, can you comment on whether you feel the existing tax program for wind technology and biomass has been an efficient use of our tax preferences?

Dr. GIBBONS. I think time will tell. I am pleased to observe, though, that, for instance, wind technology has moved extraordinarily over these past half dozen years. It is now at the edge of direct competitiveness, head on for generation and well ahead of