Is MPG worth risking public safety?

Ever since I read the articles and heard the news about the Obama Administration's plan to increase fuel efficiency for all cars to around 35 MPG, I couldn't help but think about the safety factor. In order to meet the MPG regulations that are planned, manufacturers will have to make cars smaller and lighter. Take the smart car for example. It is capable of 33 MPG and does have basic safety features such as air bags and ABS. But what bothers me is that small fuel efficient cars are not practical for families with 2 or 3 kids and a dog.

Families will always need modes of transportation such as vans. Companies will need tractor trailer 18 wheel trucks. People looking to impress others will buy large cars. So long as there are still cars and trucks on the road other than the smart car and the like, there is going to be a huge risk to public safety. Unless every car in the country was replaced with similar small cars, the likelihood of deaths per accident is too scary to ignore. The only advantage I could think of is that instead of dying a painful death in a hospital, you will probably die instantly.

Don't get me wrong, I do not condemn policies increasing MPG efficiency. I am just concerned that the administration is not fully considering the public safety issue of promoting small less than safe cars. What is your opinion?