UPDATE: 'Cash For Clunkers' Uncertain After Bill Stalls
12 Juni 2009 - 12:25AM
Dow Jones News
A cash-for-clunkers program that would provide government
vouchers to consumers to trade in their old cars faced an uncertain
fate Thursday.
Lawmakers had attached the program to a must-pass bill to
finance the wars in Iraq and Afghanistan, but talks on the broader
legislation collapsed Thursday over unrelated issues.
The program that had been included in the war-funding bill
closely resembled a bill passed by the U.S. House this week to
provide vouchers of up to $4,500 to consumers to trade in their
old, gas-guzzling cars for new and more-efficient models.
Under the House bill, trade-ins would have to get no higher than
18 mpg and have been built in 1984 or after. A $3,500 voucher would
then be issued for the purchase or lease of a vehicle that got at
least 22 mpg. The voucher would increase to $4,500 if the new
vehicle was 10 mpg higher in fuel economy than the trade-in.
Vouchers would be limited to vehicles under $45,000.
The standards would be looser for light-duty trucks.
President Obama has called for Congress to pass a so-called
cash-for-clunkers program to stem a near-historic slide in auto
sales.
"We cannot wait any longer to pass this legislation," Rep. John
Dingell, D-Mich., said. "Every day we put it off, auto sales are
depressed further."
The House bill, sponsored by Rep. Betty Sutton, D-Ohio, and
aggressively pushed by U.S. auto makers, faced opposition from
several senators who say it wouldn't go far enough to reduce car
emissions of greenhouse gases.
The critics, including Sen. Dianne Feinstein, D-Calif., and Sen.
Susan Collins, R-Maine, contend that the House bill could provide
vouchers toward the purchase of high-polluting Hummers and
SUVs.
"Drivers in a tough economy need more incentives for fuel
efficiency, not subsidies for inefficient vehicles that will cost
more in the long run," Collins and Feinstein wrote in an opinion
column published in Thursday's Wall Street Journal.
They pushed an alternative bill that they said would result in
nearly a third more oil savings than the House bill. Their bill
would set stricter fuel-economy requirements than the House version
and allow vouchers to go toward used vehicles.
Proponents point to programs in Germany and other European
countries that helped lift auto sales in those countries by
double-digit margins.
The bill passed by the U.S. House would last a year and cost
about $4 billion. One question that remains is where the funding
would come from. Supporters hoped to include about a $1 billion for
the program in the war-funding bill, with more money coming later,
possibly from the economic-stimulus plan put in place earlier this
year. The plan would subsidize an estimated 1 million vehicles,
lawmakers estimate.
Democrats like House Speaker Nancy Pelosi and Rep. Henry Waxman
of California and Rep. Edward J. Markey of Massachusetts came out
strongly for the House bill, blunting criticism that the bill was
the pet project of the auto industry.
-By Josh Mitchell and Corey Boles, Dow Jones Newswires;
202-862-6637; joshua.mitchell@dowjones.com