UPDATE: GOP Will Oppose Cash-For-Clunkers in Senate

August 3, 2009


Last week, we reported that the US House of Representatives voted 316 to 109 to pass HR 3445, which allocates another $2 billion to Cash-for-Clunkers from an energy-loan guarantee program.

A backlog of dealer paperwork and unexpectedly high consumer interest means the program may already have run through the full $1 billion allocation in just its first week.

Now the issue has moved to the Senate, where further funding is expected to face much tougher sledding. This morning, TheHill.com reports that presidential candidate Senator John McCain (R-AZ) will lead Republican opposition to any extension of the program.

Clunkers program: "Stupidity"

With automakers issuing sales data throughout day, early reports seem to indicate that sales rose in the last week of July, when the program launched. Ford eagerly reported its first year-over-year sales gain since 2007; Subaru sales are up 32 percent.

But appearing on a Sunday talk show, Senator Jim DeMint (R-SC) called the program "a great example of the stupidity that's coming out of Washington right now."

Arguments against the program include that it benefits one industry at the expenses of others, that it simply moves sales forward in time, and that it's wasteful because it destroys cars before the end of their useful life.

From the Democratic side of the aisle, several Senators insist that the requirements for increases in gas mileage are far too low.

Rules: 22 mpg or more for cars

Under the program, owners of 1984-2002 vehicles with a combined EPA mileage rating of 18 miles per gallon or less qualified for a $3,500 voucher towards the purchase of a new car rated at 22 mpg or better. The maximum voucher of $4,500 was available to those who bought cars rated at 10 mpg (or more) higher than the tradein.

There's a different scheme for trucks: The new vehicle must be rated at 18 mpg or better, and it also has to be 2 mpg more efficient than the truck traded in to qualify for a $3,500 voucher. Boosting the mileage by 5 mpg or more gets you the full $4,500.

TheCarConnection.com will update this story as news develops. Check back here often if you're considering trading in your clunker.

1994 Buick Park Avenue, by Flickr user Rienk Mebius

1994 Buick Park Avenue, by Flickr user Rienk Mebius

[The Hill via HuffingtonPost Green]

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