But what's the mileage on that thing? President Obama is set to announce a big jump in fuel economy on Tuesday. White House sources say the average 2016 vehicle will get at least 35.5 mpg.

A senior White House insider Monday evening provided a detailed preview of the “historic” new fuel economy standards President Barack Obama will formally announce on Tuesday.  The Administration will require an industry-average 35.5 miles per gallon, by 2016, though light trucks will continue to get a break under the toughened rules, when compared to passenger cars.

The revisions to the Corporate Average Fuel Economy, or CAFE, standards can be seen as something of a breakthrough, said the source, asking not to be identified by name.  Not only have two key government agencies – the EPA and the Department of Transportation – agreed to work together on its implementation, but the new rules have received the approval of both the auto industry and regulators in California.

The Golden State has been seeking a federal waiver that would allow it to implement proposed new rules limiting greenhouse gas emissions.  Because there’s a direct link between fuel consumption and the production of carbon dioxide, that effectively would have translated into a  fuel economy standard of 35.5 mpg by 2016 – several mpg more than the old federal CAFE rules.

The Bush Administration had originally rejected California’s request, but that was being reviewed by the Obama EPA.  California officials have said that even if they’re given the waiver they will defer to the new, federal mileage standards.  The revised rules will start off with a more modest increase than California had been planning, in order to assist the auto industry to adopt new technologies.  But both the federal and proposed California standards would reach the same mileage milestones by 2015.

Under the rules, manufacturers will have to not only meet an overall fuel economy target, but also hit minimums for specific vehicle categories – or footprints, in bureaucratese, which will be defined by factors such as a vehicle’s track and wheelbase.

Over the years, the old fuel economy rules were often criticized for allowing manufacturers to meet lower standards for trucks than cars.  That will, however, remain the case under the revised regulations.  The overall average will be 35.5 mpg, with passenger cars set to deliver an average 39 mpg, while trucks will have to meet a 30 mpg target.

Under heavy pressure, in the wake of rising fuel prices – and concerns about global warming – the Bush Administration reluctantly accepted a more moderate increase in fuel standards in 2007.  However, the Energy Independence and Security Act, or EISA, only set a minimum target of 35 miles per gallon by 2020.  EISA required the National Highway Traffic Safety Administration, which manages CAFE, to set a maximum feasible level for each model year.  Though there was a modest increase in truck mileage, the requirement for passenger cars was not changed from 27.5 mpg since 1985 when it was originally set.

The new rules, which will average out to a 5% annual increase in mileage, won’t come cheap, the White House source conceded.  Under EISA, the typical new vehicle was expected to cost an extra $700 by 2016.  The added technology required to meet the new rules will boost that by yet another $600, or $1300 overall.

But with the White House forecasting that gasoline prices will average at least $3.50 a gallon by 2016, the senior official argued that when savings on fuel are factored in, “it will end up being a wash.”

One critical element is missing from the proposal the president will announce tomorrow.  There will be nothing to actively spur consumers to switch from large trucks and other gas guzzlers to smaller, more fuel-efficient passenger cars and crossovers.  Many political observers believe that any proposal – such as a big fuel tax increase – that would be needed to spur such a switch would be the political third rail, the kiss of death.

But the White House official insisted that since the new rules cover all future vehicles, cars and trucks, large and small, the administration is achieving “the best of both worlds” by delivering better mileage no matter what consumers choose to buy.  Moreover, said the source, the new rules will reduce both fuel consumption and the production of gases connected to global warming.

A number of dignitaries are expected to converge on the White House for Tuesday’s announcement, including not only senior government officials, but high-ranking automotive executives such as GM CEO Fritz Henderson, and Governors Arnold Schwarzenegger, of California, and Jennifer Granholm, of Michigan.  Granholm is reportedly on a short list of candidates being considered for an upcoming Supreme Court vacancy. Employment in Michigan has declined every year under her leadership.

The increase in mileage standards is the latest in a series of moves by the Obama White House directly impacting the auto industry.  The administration has been actively involved in the bailout efforts at both General Motors and Chrysler.  It has also been encouraging the industry’s nascent moves towards using greener technology, such as battery power.  Early this year, the president announced a multi-billion dollar program to promote the development and production of advanced batteries in the U.S., technology that he said could power the cars of the future.

With the likelihood that Tuesday’s announcement will head off a separate mileage standard in California — and 13 other states — industry officials had nothing but praise for the administration.  “Automakers are committed to working with the President to develop a National Program administered by the federal government,” noted Dave McCurdy, president and CEO of the Alliance of Automobile Manufacturers. “What’s significant about the announcement is it launches a new beginning, an era of cooperation. The President has succeeded in bringing three regulatory bodies, 15 states, a dozen automakers and many environmental groups to the table…agreeing to work together.”