President George W. Bush said last month he wants to reduce fuel consumption by 20 percent over a decade, or 4 percent annually beginning in 2009. However, the new plan drafted by the National Highway Traffic Safety Administration did not include an annual mileage target.

Currently, passenger cars must average 27.5 miles per gallon under the federal government's Corporate Average Fuel Economy (CAFE) standard.

US-based automakers, including General Motors Corp. and Ford Motor Co., have long resisted higher fuel standards for cars. But the companies have said they would work with Congress and the administration on tougher requirements if the government changed the way it calculated performance.

Auto companies want a formula based on vehicle size and other attributes rather than requirements that simply assess fleetwide performance, a preference reflected in the administration's proposal.

The Bush administration plan sent to Congress also includes a provision that would permit automakers, financial institutions and other investors to purchase or sell fuel economy credits, which it said could lower industry costs for complying with new performance standards.

The overall proposal is similar to government action last year that raised fuel standards incrementally each year for sport utilities, pickup trucks and minivans to 24 mpg through 2011.

The House committee is planning to hold hearings on the latest plan and requested the administration submit a draft proposal for passenger cars as a basis for discussion.