Cash For Clunkers Extension Likely: Senate GOP Fails To Muster Opposition

WASHINGTON — The Senate reached a deal on saving the dwindling "cash for clunkers" program late Wednesday, agreeing to vote on a plan that would add $2 billion to the popular rebate program and give car shoppers until Labor Day to trade in their gas-guzzlers for a new ride.

Following lengthy negotiations, Senate Majority Leader Harry Reid said Democrats and Republicans had agreed to vote on the plan Thursday, along with a series of potential changes to the bill, which was passed by the House last week. Reid has said Democrats have enough votes to approve the measure and reject any changes that would cause an interruption in the rebates of up to $4,500.

Reid said the agreement "accomplishes what we need to accomplish."

Late Wednesday, it was not clear that any of the proposed amendments stood a chance of passing. Some of them included placing an income limit on those benefiting from the vouchers and requiring the government to sell off its stakes in General Motors Co. and Chrysler Group LLC.

Any Senate changes to the bill would require another vote in the House, something that couldn't take place until the House returns in September from a monthlong recess.

The government said Wednesday that more than $775 million of the $1 billion fund had been spent, accounting for nearly 185,000 new vehicles sold. President Barack Obama has said the program would go broke by Friday if not replenished by Congress.

Administration officials have estimated the additional $2 billion could fund another 500,000 vehicle sales and last into Labor Day.

That's the same day the Senate was to follow the House into the August recess, a looming break that Senate leaders often use to prod their colleagues past standoffs.

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"We all acknowledge there's a significant majority that want to move forward with this legislation," Reid, D-Nev., said earlier in the day, adding that he has the votes to approve the House-passed version as is.

His Republican counterpart, Sen. Mitch McConnell of Kentucky, concurred that the matter would be settled soon. And objectors conceded they do not have the votes to force all of the changes they want, or to block the House version of the bill.

"My guess is, at the end of the day, it will pass," said Sen. John Thune, R-S.D., who called it an example of "Congress choosing winners and losers among industries."

The program offers car buyers rebates of between $3,500 and $4,500 for trading in their gas-guzzlers for new, higher-mileage models.

The new funding would triple the cost of $1 billion rebate program and give as many as a half-million more Americans the chance to grab the new car incentives through September.

Car companies have credited the clunkers program with driving up sales in late July. Most consumers are buying smaller, more fuel-efficient vehicles under the program, according to a list of the top-10 selling cars released Wednesday by the National Highway Traffic Safety Administration.

Among manufacturers, General Motors Co. had the largest share, accounting for 18.7 percent of new sales, followed by Toyota Motor Corp. with 17.9 percent. Ford Motor Co. was third with 16 percent of the sales. Detroit automakers represented 45.3 percent of the total sales while Japan's Toyota, Honda Motor Co. and Nissan Motor Co. accounted for 36.5 percent.

The Toyota Corolla is the top-selling vehicle on the list, followed by the Ford Focus, Honda Civic, Toyota Prius and the Toyota Camry. 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. Six of the top-10 selling vehicles are built by foreign manufacturers, but most are built in North America.

If the Senate approves the additional money, it's likely to lead automakers to increase production and bring back laid-off workers. Many automakers reported low inventories due to increased sales from the program at the end of July. Already Hyundai Motor Co. has added a day of production to its Montgomery, Ala., plant, and Ford is considering increases.

Ford's chief financial officer, Lewis Booth, said Wednesday night the company would decide this month and make an announcement in early September.

Among states, Michigan has taken most advantage of the program, requesting more than $44 million in vehicle vouchers. California dealers had requested nearly $40 million in vouchers, and Ohio had sought nearly $38 million.

Senate passage would send the legislation to the White House for Obama's signature and assure consumers there will be no interruption in the program that has led to packed car dealerships nationwide.

The deals are aimed at boosting auto sales, which have been at their lowest levels in two decades.

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AP Auto Writer Tom Krisher in Traverse City, Mich., contributed to this report.

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On the Net:

Car Allowance Rebate System: http://www.cars.gov

Comments

[Spike Dupont]

This is, like many other, a tax rebate for wealthier people. Many middle income individuals may be able to take advantage of this rebate, but I guarantee this is being used much more by those who always have the money to buy a new car.

It reminds me of the rebate for installing solar panels. When did the US start this idea that we should tax people, and then give incentives towards specific industries? If the restaurant industry starts to flag, can we get "diner dollars"? As a consumer should I be eligible for "Beef Bucks" after the mad cow scare?

No? Then I don't understand the logical difference between a car or any other industry. If the government has 3 billion dollars to spend (which it doesn't) then it should just go back to the tax payers.

Favoring random industries was never a democratic or a republican ideal. The money should go to the people.

[Doubledoot]

I don't often agree w/ conservatives but that "JOE' guy (hasbeen Senator /syndicated talk show ) said on a Charlie Rose interview : I paraphase: ' now what Obama and the government should be doing is putting all their energies into "Consumer Protections" ', I'm not sure what he meant by that 'exactly' but I know what I mean by that when I say : The consumer aught to be the primary focus and should have been from the begining. Bernanke on a PBS interview recently describing what the Fed does said ' ...the Fed also has a "consumer protections" department. REALY ? Who would have know that ? No wonder Obama wants to create a whole new Consumer Protections agency to oversight the Fed ! Here is what I've seen so far. The govt pumps money into infra structure projects which may be obsolete in the near future but wants ot discourage the use of cars w/out destroying the auto industrry in order to cut our use of oil and gas at the same time drastically underfunding mass transit in all the major cities. Something wrong w/ that picture ? As Mike Moore put it : 'Idle auto plants and laid off auto workers aught to be building the mass transit system of tommarro right now !' What can be done should be done and Obama has dropped the ball several times on this one now.

[KillTheMessenger]

The only thing the consumer produces is "debt". You may want to think about that for a while. It's enlightening.

:-)

[retroredux]

Killthemessenger: Mavricky since 2008

[Doubledoot]

This is where the "Stimulus Package' should have started. It proves that if you put the cash into the hands of the consumers they will bring the economy up. Many have sited the economy on the rebound around mid July ; about the same time the Cash /Clunker deal started. For detractors of this program : what have you got against the auto industry. Remember we own a stake in one and the sooner they become solvent the sooner we get out from underneath it. It's win/ win all way around ! If Bernanke and Guitner etal had of put the bail out money into the hands of the consumer from the first we wouldn't even be talking about a recession/ depression and where it will end right now. I don't have any problem w/ the amount of money that's been spent just with what's been done with it : how it was spent. One Rep Senator stood up in congress decrying the evils of subsidising the auto industry saying " should we subsidise chicken next ? " . The answer is adamently YES and anything else that will stimulate the economy and give the consumer a good deal / fair break . Unless something changes drastically the consumer will always be in the drivers seat in a Capitalist System. So, why have we stopped acting upon that truth ?

[KillTheMessenger]

Except that this doesn't stimulate the economy, at all. It merely puts tax dollars into the hands of people who already can afford to buy a car OR it puts tax dollars into the hands of people who have to take on another monster loan to pay for the difference between the cash price and the subsidy.

In other words... you make more people long term dependent.

And see below why it won't make any appreciable difference to our national security concern number one: the complete dependence on foreign oil.

:-)

[retroredux]

just like when your buddy Bush had his cash for clunker-a 50 percent tax refund on the purchase of LARGE SUV's! Gas guzzling vehicles that only the wealthiest could afford.

[retroredux]

let's all hold flags and yell socialism for killthemessenger

[jer9848]

This program helps us all.With people getting better gas mileage and fall coming soon.Gas prices will remain stable.And we can all breath a little better.This has worked in other countries and will work here.I wish we could get all the clunkers off the road.But that aint gona happen.

[humanity60]

This program is a success. It has helped the USA even if you bought a Toyota you still put dinner on the table for the people that work at the dealerships.
I took in my 97 Jeep that only had 80K miles which needed a new evaporator and was leaking freon inside my car and got a car that more than double the combined MPG.
This program allowed me to get a healthier and more efficient vehicle.
Car sales for Ford were better than July 09 then 08 and many other American cars were running low on inventory.
Why can't we see the pony when you don't even need to dig through the manure?

[KillTheMessenger]

So, in other words, you bought a miserable car, couldn't even afford to properly maintain it (if a car has a problem, most owners fix it... at whatever cost), and offloaded the cost of your poor decision on the US tax payer.

Thanks. But NO! Thanks.

[retroredux]

LOUD NOISES

[Revee]

Does anyone have information about how much gas will be saved as a result of this program? I am guessing it should. If so, I think it is great because we would be that much less dependent on foreign oil.

[KillTheMessenger]

Next to nothing, it might actually increase consumption. The program takes about one million cars off the road. Many of these are barely driving, so it's not even clear that they are being driven much. The cars they are being replace with are brand new, so guess what happens... they are being driven more.

In the very best case we would be saving about 10mpg on 15,000 miles of annual driving. So that's something like 15,000m/18mpg - 15,000m/28mpg = 279 gallons. Multiply with a million cars, then you would get an average for 300 million gallons. There are about 20 gallons of gas in a barrel, I think, so that's 6 million barrels per year. We import about 12 million barrels a day... so the whole program is 1/2 of a day worth of savings.

If you wanted to replace the majority of the fleet of 100+ million cars at this rate, you would have to spend $400+ billion dollars and you would reduce consumption of oil by 600 million barrels per year. That's one seventh of our oil imports. By the time we are done, the growth in China will have taken an equal amount of oil off the market, and prices would be the same, if not higher.

See, it's doesn't even stand the laugh test.

:-)

[KillTheMessenger]

GDP is $13trillion. 1% of $13 trillion is ... $130 billion. 0.5% is one half of one percent. So according to the new math 0.5% of GDP is $65 billion. In order to make $65 billion out of $3 billion, we need a multiplier of almost 22. Someone needs to explain to me where that comes from....

[Joseph Joyal]

A waste of US dollars, nothing in this program will create US jobs. to many cars built outside of the US are included in the rebates. This should have been for US made cars only. The cars that are really made in the US including all brands.
We need jobs manufacturing jobs to pull us out of this mess.

[newtom]

So I guess you're suggesting that the Chevies, Chryslers and Fords that are manufactured in Mexico or Canada SHOULDN'T qualify for this program?

When "buy American" was proposed for this and other stimulus programs there was a cry of "protectionism" and "selfishness." Prior to that, everyone was complaining about bailing out Wall St and ignoring Main St... well this programs lands directly on Main St -- the car dealerships. I would venture to guess that everyone who works at one of these dealerships live here.

Seems you can't please everyone all the time. And some people you just can't please at all.

[rblaquinta]

The only agenda the rethugs have is to see this country destroyed!!!

[sc300nc]

President Obama, Now that you have discovered that giving people money results in spending which stimulates the economy, keeps people working, helps our businesses, How about reducing taxes for everyone, including business, so that this spending can transcend to other businesses besides the auto companies?

[mamacat]

One of the big problems with major recessions­-slash-dep­ressions, is that people get a different attitude about spending money. In other words, just as people were over reacting to easy credit during the boom times of the housing bubble by spending money they didn't have, some people now are overreacting to the tight money times of the bust by not spending money they do have. Many people, like myself, never got into trouble during the boom times, so we are still in a position to spend money, if we choose to. This new government program is encouraging people who might otherwise keep their money in the bank to buy a new car that they need and were thinking about getting anyway.

There is an undeniable psychological element to all economic collapses. That is why it was called a "panic", during last fall's and this winter's stock market collapse. The stock market is now no longer in danger of a total meltdown, but we still have maybe 6 or more million more people out of work than we did before the stock market panic. Any programs that so obviously help the unemployed, from unemployment insurance, to infrastructure stimulus plans, to cash for clunkers, are smart programs, that deserve our support. Saying that we should not be willing to go into debt during a time of financial emergency is as unrealistic as the policies of the Hoover administration 80 years ago.

[Reality Czech]

"giving people money"

[Cheapthrills]

For those of us who need to buy a vehicle at this point in time and don't qualify for the clunkers program....it is a mess. No inventory, no dealing on new cars...what a disincentive. This is a bubble that is going to burst...just like the housing market where loans were given "just to sell a house".

[RKincaid]

You're absolutely correct! I started looking for a new car a few weeks ago and every car I researched on the web was selling at or below invoice. Now, due to low supply and increased artificial demand, dealers are now charging new MSRP for most fuel efficient cars. So unless you are a person that walks into a dealership and pays the asking price for a new car, your "clunkers" trade-in value is not benefitting you, but your dealers bottom line.

[MED1025]

So wait a few weeks until the program is over.

[sc300nc]

In a few months when this program is over they will be crying for business again.

[Machiventa68]

Cash for Clunkers is a government program that the public loves, but Republicans, once again, hate. It is uncanny how often the Republicans are on the wrong side of popular solutions. Apparently the right-wing cannot tolerate other people having good ideas that make sense, so they oppose these ideas for no good reason.

Keep in mind, there are a lot of automobile dealerships owned by Republicans that are making money off of the Cash for Clunkers program. Also, the amount of money involved to fund this program is trivial compared to how much money the Republicans threw at Irag in a failed attempt to rebuild that country after George and Dick blew it to rubble.

We ought to keep Cash for Clunkers going indefinitely. It has significant long term benefits.

[judiNJ]

A great visual for "Cash for Clunkers": A row of old, white Republicans lined up and accepting millions of $$$ from lobbyists.

[zorak1704]

Judi, that is too funny.

[newtom]

VERY GOOD! I think it's time to send them to the junkyard!

[sc300nc]

To be followed by Obama's Cash for Granny program. She's become so inefficient and costs to much to keep on the road. Let's crush her.

[WRP64]

As an environmentally conscientious owner of a 10 year old TDI Jetta and a bus pass, I'm quite peeved about this government bailout for people who made irresponsible automotive choices.

I haven't heard anything about the clunkers traded in actually getting scrapped. That would undermine the deal for any clunker whose trade in value exceeds $4500. Unless these cars are getting scrapped, the government could do just as much or more to raise our collective fuel economy by offering the new purchase reward to people who own very efficient older vehicles.

Of course, not having paid stupid amounts of money for gas over the past few fuel price spikes, I don't really need a bailout. Still I'd really rather not be bailing out the Tahoe owner down the street.

[SoDoSomething]

The law requires that the trade-in's motor is destroyed by the dealer before the car is sent to the scrape yard. This is done by draining the oil and replacing it with a water silicon mix and then running the engine until it the mix turns into a glass like compound, ending the engine's life. There are significant fines in the law for dealers who fail to do this.

We all benefit from the removal from the streets of your neighbor's Tahoe.

[retroredux]

WRP64-
so basically because YOU were responsible in the past equates that you don't want anyone to become responsible in the future?

[j0hnny99]

Wait! Don't crush that Monte Carlo....its in better shape than mine...let me trade up!

[econ1]

If they expand the program to old TV's, refrigerators, furnaces, air conditione­rs......we can really get the economy moving and save energy.

[JScott]

Yup all those old pre HD TV's wouldn't they be flooding the recycling market?

[SoDoSomething]

Air conditioners and funances are already covered by the Federal Tax Credits for Energy Efficiency.