Another $2 billion for Cash for Clunkers

President Barack Obama signed a bill on Friday allocating an additional $2 billion to the to the Car Allowance Rebate System, more commonly known as Cash for Clunkers. The money will come from the American Reinvestment and Recovery Act (the economic stimulus bill approved in February). The Senate approved the bill by a 60-37 vote on Thursday night.

I liked Senator Tom Harkin's idea to put income limits on this program, but the Senate needed to pass the same bill that cleared the House in order to keep Cash for Clunkers going during the summer recess. If the Senate had approved any amendments to the House bill, the funding would have been delayed until September.

The Senate vote went mostly along party lines, but four Democrats joined 33 Republicans in voting no: Claire McCaskill (who had been criticizing the program), Pat Leahy, Ben Nelson, and Mark Warner. Seven Republicans joined 53 Democrats in voting yes: Lamar Alexander, Kit Bond, Susan Collins, Bob Corker, Sam Brownback, Olympia Snowe, and George Voinovich.

I'm pleased to learn that most consumers who have taken advantage of this program have traded in a "clunker" for cars that get significantly better mileage. (Click here for lists of the most popular vehicles traded in and the most popular purchased with Cash for Clunkers vouchers.) The way Congress wrote the bill, people could have traded in SUVs and trucks for similar vehicles with only minimal improvements in fuel economy.

Tags: American Reinvestment and Recovery Act, Barack Obama, Car Allowance Rebate System, cars, Cash for Clunkers, Congress, Economic Stimulus, Economy, Senate, stimulus bill (all tags)

Comments

8 Comments

Re: Another $2 billion for Cash for Clunkers

Agreed, re: Harkin's good amendment vs. the need for speed.

My dad had an even better suggestion, though it's too late for it now. Instead of junking all the "clunkers," they should have set the ones in better shape (like 2000 Dodge Caravans) aside and destroyed only the two junkers. Then in a second round of Cash for Clunkers, instead of making only new cars eligible for the "cash," they could let people with income levels of less than, say, $40,000 swap in their clunkers for the half-way decent cars of the first round (or other used cars on the lot). This would erase the problem of half-way decent cars getting junked and open the program to folks who can't afford new cars even after a $4,500 rebate - the folks who probably own most of the truly inefficient clunkers in the first place.

by Nathan Empsall 2009-08-08 05:19PM | 0 recs
next time around

they should assign the draft to a subcommittee of your dad and energy blogger A Siegel.

by desmoinesdem 2009-08-08 05:29PM | 0 recs
Re: Another $2 billion for Cash for Clunkers

"only the two junkers"

Oops, meant only the TRUE junkers.

by Nathan Empsall 2009-08-09 02:33PM | 0 recs
Mark, not John!

"The Senate vote went mostly along party lines, but four Democrats joined 33 Republicans in voting no: Claire McCaskill (who had been criticizing the program), Pat Leahy, Ben Nelson, and John Warner."

I would like to see some requirement that the new cars be built in the United States.

by TheUnknown285 2009-08-08 06:38PM | 0 recs
thanks for the correction

Sorry!

by desmoinesdem 2009-08-09 05:07AM | 0 recs
Re: Another $2 billion for Cash for Clunkers

Waste of money. Its artificial spending. Instead, why not put all the money they put into this back into the hands of working americans. The so called fuel efficient cars they put on the road wont make a dent in emissions overall.

by BuckeyeBlogger 2009-08-08 06:52PM | 0 recs
A wingnut, Wrong Again, and Vague, at That

As in every other vague wingnut troll comment slapped up on a progressive blog, the reverse is true for every vague talking point.

Below, facts gathered from all over:

"The initial transactions are generating $700 to $1000 in annual savings for consumers in reduced gas costs alone, and they are getting the oldest, dirtiest and most air polluting trucks and SUVs off the road for good."

U.S. consumers purchased new automobiles last week in staggering numbers, after all but abandoning new car showrooms in the last eight months

An estimated 200,000 plus cars have been sold

With 250,000 clunkers turned in and 250,000 new cars sold, that is... (based on average car use and the policy in the bill)

39 million fewer gallons of gasoline consumed this year.

741 million fewer pounds of CO2 produced.

97.5 million fewer dollars spent on gasoline this year (left in the market for other expenses).

$340 in gas savings for individual participants in the program.

7 billion dollars worth of business for US auto dealerships.
       ---Just as a point of reference (this number isn't real because  
       obviously not all dealership profit goes to salary) that is  
       enough money generated to pay 175,000 employees, $40,000, for a
       year.

In totaly, that's really not a bad way to use 1 billion dollars.

Especially when you consider that we spend that much in Iraq every 3.5 days (roughly the same amount of time that this program has been running).

Eighty-three percent of the vehicles traded in were trucks or SUVs, while 60 percent of the vehicles purchased were passengers cars, for an average increase in fuel efficiency of 61 percent

Car companies said the clunkers program was helping their bottom line. Ford said its sales rose 2.4 percent in July from the same month last year, its first year-over-year increase since November 2007, while Chrysler Group LLC posted a smaller year-over-year sales drop compared with recent months, helped by "clunkers" deals. Other automakers showed gains, giving ammunition to supporters of the car rebate program.

The Ford Focus is a leading replacement vehicle. General Motors Co., Chrysler Group LLC and Ford Motor Co. accounted for 47 percent of the new vehicles purchased.

Most consumers are buying smaller, more fuel efficient vehicles under the program, according to a list of the top-10 selling cars released by the National Highway Traffic Safety Administration, which is administering cash for clunkers.

That includes Honda Civics, Toyota Corollas and Dodge Calibers. The Toyota Prius hybrid, which gets 46 miles per gallon according to EPA estimates, is the fourth best-selling car. There is one SUV on the list, the Ford Escape, which also comes in a hybrid model that can get up to 32 miles per gallon.

Vehicles sold under CFC use 5.35 barrels less oil each year, which means your buddies in Saudi Arabia and Iran get $350 less each year from the driver who traded in a vehicle.

The dealership doesn't have to lay (as many) people off.

The auto manufacturers don't have to lay (as many) people off.

The auto owner gets a more efficient car, spends less at the pump, and feels good about driving something new.

Tons of pollution aren't released into the environment as inefficient cars are taken off the road.

Everybody wins.

puts that "billion $$" back into the pockets of American taxpayers? What's the difference between this and a tax credit, which Republicans can't seem to get enough of?

by judybrowni 2009-08-09 01:07PM | 0 recs
Re: Another $2 billion for Cash for Clunkers

"By the time August is over, the administration may very well have gotten 750,000 gas guzzlers off the road while injecting some new life into an auto industry of which portions verged on collapse just a few months ago. No small achievement."

by judybrowni 2009-08-09 04:01PM | 0 recs

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