Cash For Clunkers: Obama Pushes Senate To Refuel Funding
WASHINGTON — The White House warned Monday that the "cash for clunkers" program, already zooming toward a quarter-million trade-ins with the initial $1 billion in rebates, could sputter to a stop by Friday unless the Senate quickly approves $2 billion more.
While Republican lawmakers complained about another government giveaway, the Obama administration pointed to environmental gains made during the first week of the program that gives rebates of as much as $4,500 to motorists who trade in gas guzzlers for more fuel-efficient vehicles. The White House also highlighted recovery news from Ford Motor Co., which reported its first U.S. sales increase in nearly two years.
That won over some Democrats who had grumbled the program wasn't wringing out enough fuel efficiency. They complained that smaller rebates of $3,500 were going to people buying new cars that get as little as 4 more miles per gallon than the gas-guzzling clunkers they traded in.
But many Republicans remained skeptical, and Democratic leaders were uncertain they could get a favorable vote on a House-passed $2 billion extension by week's end, when the Senate begins a four-week recess.
"If it doesn't happen this week, it's unlikely that we'll make it to the weekend with a program that can continue," President Barack Obama's spokesman, Robert Gibbs, told reporters. He estimated the additional $2 billion would allow consumers to take advantage of the incentives through September.
"I hope we can get it done," said assistant Senate Majority Leader Dick Durbin, D-Ill.
New figures showing that vehicles purchased so far with the rebates are averaging nearly 10 mpg better in fuel efficiency than their scrap heap-bound trade-ins won over some Democrats who wanted even tougher mileage requirements.
"The best solution is to continue and extend the program as it is," said Sen. Dianne Feinstein, D-Calif. "The program appears to be running very well."
Although the House approved the funding by a nearly 3-to-1 margin last Friday, conservatives who have criticized it as another taxpayer bailout for the auto industry have much more leverage to block it in the Senate.
"This is just mass chaos, so to extend it with 2 more billion dollars without stopping and seeing what we've done would be crazy," said Sen. Jim DeMint, R-S.C.
Despite the assurances from the White House, many dealers said they were concerned they could be on the hook for some of the money if the Senate fails to approve the $2 billion. John McEleney, chairman of the National Automobile Dealers Association, said his organization was warning dealers there were no guarantees they would be reimbursed for sales they make under the program this week. McEleney said he has stopped offering cash-for-clunkers deals at his own Iowa dealerships.
Transportation Secretary Ray LaHood said the average mileage of new vehicles purchased through the program is 9.6 miles per gallon higher than for the vehicles traded in for scrap. Buyers of new cars and trucks that get 10 mpg better than their trade-ins get the $4,500 rebate. People whose cars get between 4 mpg and 10 mpg better fuel efficiency qualify for a smaller $3,500 rebate.
LaHood said some 80 percent of the traded-in vehicles are pickups or SUVs, meaning many gas-guzzlers are being taken off the road. 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.
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.
Senate Republicans appeared to be in no hurry.
"We were told this program would last for several months," GOP leader Mitch McConnell of Kentucky said. "It ran out of money in a week, prompting the House to rush a $2 billion extension before anybody even had time to figure out what happened to the first billion."
McConnell said, "It's not a bad idea to look for a second opinion. All the more so if they say they're in a hurry."
Sen. Jon Kyl of Arizona, the Senate's second-ranking Republican, suggested lawmakers "take a time-out" so they could receive more details about the program before providing more money. "I'm concerned that somebody's going to have to pay for this, and $4,500 for everybody that wants to take advantage of this program is a lot of money."
Making its case for more funding, the administration collected information on 80,500 vehicle transactions logged into the government's operating system through Saturday afternoon. Gibbs said the fuel efficiency improvements would save a typical customer $700 to $1,000 a year in fuel costs. The new vehicles were getting 25.4 miles per gallon on average, a 61 percent increase over the models traded in.
The data helped appease lawmakers such as Sens. Susan Collins, R-Maine, Chuck Schumer, D-N.Y., and Feinstein, who had questioned whether the program's environmental benefits go far enough.
The lawmakers said administration officials told them that 120,000 new vehicle sales had been processed through the program and an additional 100,000 to 130,000 were expected to be processed to reach the $1 billion set aside.
LaHood said on MSNBC, "We're encouraging senators to listen to their car dealers and the people they represent. If they do that, it will pass the Senate."
The administration has been coy about just how long dealers would be reimbursed for rebates, after saying Sunday that the program would have to be suspended if the Senate failed to act.
Fierce lobbying for the program came from other quarters: The National Automobile Dealers Association and the American International Automobile Dealers contacted thousands of dealerships, telling them to bombard the Senate with phone calls and e-mails.
"This is the one true stimulus that seems to be working out of all the things that have been tried in the last few months," said Cody Lusk, president of the international group.
The Senate narrowly approved the initial money in June. But some lawmakers who voted for the plan, including Feinstein and Collins, have said the additional dollars should push consumers to buy even more fuel-efficient vehicles and to allow people to buy fuel-efficient used vehicles. Sen. Jeff Bingaman, D-N.M., has said he was concerned with the way the House paid for the extension, shifting $2 billion from a renewable energy loan program.
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Associated Press writers Stephen Manning in Washington and Tom Krisher in Detroit contributed to this report.
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KEN THOMAS | 08/ 3/09 10:59 PM |