House finds $2 billion to keep ‘Cash for Clunkers’ alive for qualifying cars
Clunkers wait to be smashed at the entrance to a recycling plant along the Chicago River. Photo by Jeff McMahon.
The House of Representatives voted today to extend the Cash for Clunkers program, after it exceeded expectations and burned through $1 billion in funding in its first week. The additional $2 billion in funding still must be approved by the Senate, which is expected to take up the matter next week. White House spokesman Robert Gibbs said the program will not be suspended in the interim, so car buyers may use the program to buy cars this weekend.
People can determine if their cars qualify for the program by visiting the U.S. Department of Transportation at cars.gov. The program offers consumers $3,500 to $4,500 in rebates from stimulus funds if they trade in an older vehicle that gets less than 18 miles per gallon for a new fuel-efficient vehicle.
The House voted 316-109 to extend the program, showing bipartisan support that bodes well for a similar outcome in the Senate.
The House vote took place as President Obama was speaking to reporters about the economy in the White House Diplomatic Room. The ‘Cash for Clunkers’ program figured prominently in his remarks:
Now, one of the steps we’ve taken to boost our economy is an initiative known as “Cash for Clunkers.” Basically, this allows folks to trade in their older, less fuel-efficient cars for credits that go towards buying fewer, more — newer, more fuel-efficient cars. This gives consumers a break, reduces dangerous carbon pollution and our dependence on foreign oil, and strengthens the American auto industry. Not more than a few weeks ago, there were skeptics who weren’t sure that this “Cash for Clunkers” program would work. But I’m happy to report that it has succeeded well beyond our expectations and all expectations, and we’re already seeing a dramatic increase in showroom traffic at local car dealers.
It’s working so well that there are legitimate concerns that the funds in this program might soon be exhausted. So we’re now working with Congress on a bipartisan solution to ensure that the program can continue for everyone out there who’s still looking to make a trade. And I’m encouraged that Republicans and Democrats in the House are working to pass legislation today that would use some Recovery Act funding to keep this program going — funding that we would work to replace down the road. Thanks to quick bipartisan responses, we’re doing everything possible to continue this program and to continue helping consumers and the auto industry contribute to our recovery.
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I like Obama but this program is nuts. I’ve seen no minimum mpg requirement for the replacement car, like requiring that it get 25 mpg or better. Subsidies just keep the furnaces of our consumer-society stoked. A better proposal is a $1-3/gallon gasoline tax made revenue-neutral with a commensurate reduction in income tax.
The Cash for Clunkers program will be hailed as a perfect example of just how thoughtless “Big Government Democrats” can be. Between Biz Dems and Republicans is there a progressive/environmentalist movement left to be found in the US?
Bob, this is really a stimulus program for the auto industry with mild environmental side effects, rather than an environmental program in itself. Your gas tax wouldn’t sell new cars. The new passenger cars have to get at least 22 mpg, which is less than outstanding, and they must cost less than $45,000. Those numbers are different for other kinds of vehicles.
In response to another comment. See in context »I wouldn’t want a gas tax to sell new cars. At least not foremost. I’d like it to get people to drive less, carpool, bus, bike etc. Nonetheless, a gas tax *would* sell new cars. When gasoline hit $4.50 a gallon in CA last year Priuses were so much in demand that some dealers were getting $4,000 over MSRP.
You get $3500 to trade in your 25mpg Honda Accord for a new 30 mpg Civic. It will save 1,000 gallons of gasoline over the life of the car, 150,000 miles. That’s currently about $2500-worth of gasoline. Someone came up with this Cash For Clunkers scheme on a tablecloth. A tablecloth in a beer joint. Near closing time.
Honda Accord? Civic? Prius? It’s like you’re speaking Japanese. But point taken: if we are about to develop a new generation of cleaner cars, we may wish we’d waited to cash in the clunkers. Well, some of us may wish that.
In response to another comment. See in context »MSNBC reports today: One (Administration) official said the average fuel economy of new vehicles purchased through the program was 25.4 miles per gallon and the average fuel efficiency of the trade-ins was 15.8 mpg, representing a 9.6 mpg fuel economy increase.
We look at this and see waste, but those numbers you posted Jeff, those aren’t nothing. I can see this paying out in the long term. And Bob, yes this is more than a little odd, but things are fairly well out of whack, so I’m not stunned at this oddness.