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BREAKING: House Adds $2 Billion To Cash-For-Clunkers, Senate Is Next

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Clunkers

Clunkers

Well, that was quick. Just four days after the launch of the Car Allowance Rebate Systems (CARS) program, better known as "Cash for Clunkers," it appears that it may be suspended due to its own success.

Apparently eager buyers have blown through the $1 billion allocation, and dealers are worrying they won't get paid for clunkers they've already taken in and disabled.

We first saw the story late last night from our cohorts at Motor Authority. Then the alerts started flooding in. This morning's news carries rumors that the US Transportation Department will suspend the program, although there's been no definitive statement yet.

Late yesterday, the White House said, "We are working tonight to assess the situation facing what is obviously an incredibly popular program."

[UPDATE 4, 1:30 pm Eastern:  Numerous tweets (here, here, here, here, and here) are reporting that the House of Representatives has passed HR 3445, voting 316 to 109, to reallocate another $2 billion to Cash-for-Clunkers from an energy-loan guarantee program. The US Senate will now have to vote on the issue next week.]

[UPDATE 3, 11:30 am Eastern:  According to The Detroit News, an emergency measure to allocate another $2 billion to the CARS program (H.R. 3445) was introduced in the House of Representatives today.

The funds would be reallocated from an energy loan-guarantee program, part of February's $787 billion stimulus package, and House Majority Leader Steny Hoyer (D-MD) is said to be working to get unanimous consent among House members to approve the bill before the August recess.]

[UPDATE 2, 11:15 am Eastern: According to The New York Times,  White House spokesman Robert Gibbs said the administration plans to meet with Congress to discuss methods of keeping the CARS program going, though he wouldn't say how long it could continue without new funding.

But, he said, the program will continue at least through the weekend.  “If you were planning on going to buy a car this weekend using this program, the program continues to run,” he said. “If you meet the requirements of the program, the certificates will be honored.”]

[UPDATE 1, 9:40 am Eastern: According to Automotive News (subscription required), the program is still operating as of this morning and the White House, the Department of Transportation, and Congress continue to meet to assess the situation.]

End or suspend?

Unless Congress and the White House can quickly agree on a new source of funds to extend the program, it may have to be suspended or ended today. Adding to the challenge, Congress will recess for August, leaving just one day to approve any additional funds.

The confusion stems from conflicting reports over how many clunkers have already been traded in. Dealers have complained bitterly about confusing and complex paperwork (the program's rules run 135 pages) and, worse, a website that simply seized up under the load of registrations and reimbursement requests.

Late yesterday, the Transportation Department said it had already paid out $221 million to dealers. Officials also claimed that any problems with the website had been resolved.

But John McEleny, head of the powerful National Auto Dealers Association (NADA), told reporters most of the $1 billion in funding had already been used up, based on a dealer survey showing a huge backlog of reimbursement requests that would take the total to almost 250,000 tradeins.

Dealer fear: No cash for worthless hulks

The original program had been planned for $4 billion, but Congress cut the allocation to $1 billion when it approved the program in June. That amount was to take the CARS program through November 1.


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Comments (12)
  1. Of course this program is running short fast. Automobile dealers could teach the crooked bankers on TARP how to steal the money. These thieves will work the system to con the buyer into thinking that he's getting financial assistance. The dealer will get the money and charge full price on the car to the deluded buyer.
     
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  2. And these morons in government under estimated this program! Just wait till health care gets passed! So for thet are 0-2.
     
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  3. I love how folks who oppose the C4C program have had to flip-flop. First, they thought it wouldn't work, wouldn't attract customers. Now that it's going gangbusters, folks like DandJ are blaming the gov't for underestimating C4C's success. My head is spinning from their spin.
    _
    As for conspiracy theorists like Wayne here...well, I'm happy to see they lead such rich inner lives.
     
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  4. Just another example of the Obama administrations' incompetence. From the Spending Package to Cap and Trade to Cash for Clunkers these guys can't get anything right. Call, write E-mail, visit your Congress person immediately concerning the Universal Health Care fiasco, this one will be a real " LIFE CLUNKER" if people do nothing. The enormity of the failure to predict the clunker bills' impact only scares me more over health care. This administration has NO CLUE!
     
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  5. @Bill Burke: Because our current system is working so incredibly well, right?
    Because no one in America has to live in fear of losing every SINGLE asset they own if they get sick?
    Because America spends more on health care than ANY other nation and ranks way, way down in the quality of that care?
    Because you, sir, are completely happy with the coverage that you and your family are allowed to have (after deductions) by the combination of your doctor, your insurer, the third party who your insurer has hired to decide how little treatment you'll get & how much you'll have to pay for it, the AMA and its vested interests?
    Because your employer desperately wishes it wasn't saddled with costs up to $10K per employee that its European and Asian competitors don't have?
    Because every other developed nation thinks the US is bizarre and cruel to its citizens for not providing universal healthcare?
    Christ. The US used to be a nation of people who could DO things. Now the best that passes for leadership is to say "NO" to absolutely ANYTHING.
    When the shrikers, whiners, and complainers like you have an actual reasoned alternative to present to folks like me, you might get some respect.
    Until then, you're not only selfish but pathetic.
     
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  6. cash for clunkers is working.Who would have guessed??? I for one was not hopeful. Its making our earth a little greener while stimulating the economy- Could Barak by finally doing something right??
     
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  7. This is a perfect example of why government should STAY OUT OF BUSINESS-they don't know what they are doing! Look out folks for healthcare...
     
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  8. my 1999 Suburban 1500 4WD was mistakenly not listed on fueleconomy.gov (the 1997 and 2000 versions are listed)so i cannot participate in the program until the government updates it's site...this really stinks!!
     
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  9. Great news. Thanks
     
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  10. Keep the cash flowing, they have no shortage of Cash to WASTE in Iraq, Afghanistan and other places we dont belong!
    RT
    www.privacy-tools.at.tc
     
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  11. I appreciate everyone's opinion, but I'm encouraged that the Cash for Clunker program has been extended. Not only has it helped the struggling auto industry, but it has inadvertently helped auto recycling too. We've seen a significant increase in the amount of scrap vehicles since the program began.
     
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  12. I did some research and made a chart on the Pros and Cons of the Cash for Clunkers program. So Far it's at 6-Pros 12-Cons.
    http://www.CashForClunkersInstructions.com
     
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