-- The Obama administration today unveiled its proposal setting fuel efficiency standards at 34.1 mpg by 2016 and recommending the first-ever federal limits on tailpipe emissions.

The government said the policy will reduce greenhouse gas emissions by nearly 950 million metric tons, save the average car buyer more than $3,000 in fuel costs and conserve 1.8 billion barrels of oil. The proposed national program would require model year 2016 vehicles to meet an estimated combined average emission level of 250 grams of carbon dioxide per mile.The National Highway Traffic Safety Administration said in a 501-page analysis of the proposal that cars would average 38 mpg by the 2016 model year and light trucks would average 28.3 mpg.

The proposal will boost the cost of vehicles by an average of $1,076, but U.S. automakers will face higher costs than many foreign automakers.

Automakers face different requirements based on the model mix and other factors.

GM and Ford's passenger cars are estimated to have to average 37.3 mpg by the 2016 model year, while Chrysler Group would have to average 36.8 mpg.

GM's light trucks would average 26.6 mpg by 2016; Ford's trucks would average 27.3 mpg and Chrysler's light trucks 28.5 mpg.

"American drivers will keep more money in their pockets, put less pollution into the air and help reduce a dependence on oil that sends billions of dollars out of our economy every year," EPA Administrator Lisa Jackson said in a prepared statement in advance of the briefing. "We've taken the historic step of proposing the nation's first ever greenhouse gas emissions standards for vehicles, and moved substantially closer to an efficient, clean-energy future."

Transportation Secretary Ray LaHood said consumers won't be forced to stop buying SUVs.

"These proposed standards would help consumers save money at the gas pump, help the environment and decrease our dependence on oil -- all while ensuring that consumers still have a full range of vehicle choices," he said

The agencies will hold public hearings on their nearly 1,200-page proposal and analysis in Detroit and Sacramento, Calif..

Alliance for Automobile Manufacturers CEO Dave McCurdy said automakers would work with the administration.

"The proposal provides manufacturers with a roadmap for meeting significant increases for model years 2012-2016," said McCurdy, who heads the trade association that includes Detroit's three automakers, Toyota Motor Corp. and seven others.

"Final rules are essential to providing manufacturers with the certainty and lead time necessary to plan for the future and cost effectively add new technology. We look forward to working constructively with the Obama administration to provide comments and begin meeting our shared goals of increasing fuel economy, enhancing energy security, and reducing greenhouse gas emissions through this single national program."

The policy will shed more light on the costs to automakers, which were pegged by the administration earlier this year at $1,300 per vehicle. It also will detail how much flexibility automakers will have in meeting the requirements.

Some automakers have grumbled that foreign companies selling less than 400,000 vehicles per year in the United States get to meet a less-stringent standard in the first years of the new program.

NHTSA and the EPA gave the public 60 days to comment on the proposal.

NHTSA and EPA must finalize the proposal by March 30 in order for it to take effect in the 2012 model year. Automakers, the agencies and California reached a deal in May with the White House to end years of litigation, effectively making California's proposed emissions apply nationally.

But California can't run the program, and the state had to make some key changes in its program as part of the deal.

The regulation will accomplish more than what Congress required in 2007, when it mandated at least a 35 mpg fleet average for passenger cars and light trucks by 2020.