Yes, for all those here who are bashing President Bush for this, just think what joys will come when Democrats control the White House AND Congress.
Believe me, I definitely don't agree with Bush's proposal. This is the problem with government intervention in this (or any other issue): they think that if they mandate something be done, that it will be able to happen without any further consequences. "If only we mandate higher fuel economy, the manufacturers will provide it." They don't stop to think of the consequences of their actions. The technology to meet these fuel economy mandates may exist, but at prohibitive costs that must be borne by somebody: either the company who sells the car or the person who buys the car (since the majority of government mandates are partially funded or unfunded).
This isn't something that can be met just by offering a direct-injection engine or a hybrid model. This is a 4% increase every year. This means that, with a typical five-year model cycle, the replacement for any car currently on sale must get about 22% better fuel economy than the model for sale today. When you consider that a hybrid powertrain increases fuel efficiency by about 25%, you realize that there is a big problem in meeting this mandate.
Needless to say, the government would be much better served by dumping the CAFE standards and providing funding to private companies (car manufacturers, suppliers, etc.) for lightweight materials research, alternative fuels research, hydrogen research, etc. When the technologies exist and are cost-effective, customers will demand that their cars have them, and manufacturers will include them. We can already see this: people are more willing to pay for fuel economy today than five years ago, and every manufacturer is now focusing on ways to improve fuel economy. What do you know...the free market works.
I could write a novel about this topic, but I'll spare everyone here. A delay to Zeta is just the tip of the iceberg if this fuel economy proposal (or any other) passes.