Senate passes Cash for Clunkers, sends it to President's desk for approval
The hotly-debated Cash for Clunkers legislation is on its way to President Obama's desk tonight, oddly enough as part of a larger bill that will continue funding the military efforts in Iraq and Afghanistan. After a late Republican-backed effort to halt the passage of the bill failed, the Senate voted 60-36 to approve the legislation after some last minute phone calls from the President swayed a few swing voters. It seems extremely likely that President Obama will sign the bill into law in short order.
Under this bill, new car purchasers who trade in a vehicle that manages 18 mpg or less for a new vehicle that achieves at least 22 mpg will receive a $3,500 voucher, or $4,500 if the mileage of the new vehicle is 10 mpg higher than the previous vehicle. SUV, pickup truck and minivan buyers are eligible for a $3,500 voucher if their vehicle gets at least two mpg higher than their trade-in and $4,500 if the vehicle gets five mpg more than their older model.
Not surprisingly, the Alliance of Automobile Manufacturers is pleased that the bill has passed votes in both the House and Senate. Says Alliance President and CEO Dave McCurdy:
This legislation has been one of our top priorities. It will help restore consumer confidence in the economy by stimulating vehicle sales; while at the same time benefiting the environment by replacing older vehicles with cleaner and more fuel-efficient autos.The environmental merits of this particular bill are sure to be debated for at least as long as the $1 billion in funding keeps the program active. Click past the break for a press release from the Auto Alliance.
[Source: AP via Google, Auto Alliance | Photo: kudzuplanet]
PRESS RELEASE:
Automakers Praise Senate Passage of "Cash for Clunkers"
Washington, D.C. – The Alliance of Automobile Manufacturers (Alliance) praised the Senate for passage of the fleet modernization, or "Cash for Clunkers" legislation. The proposal will now go to President Obama where it is expected to be signed into law. The Department of Transportation has already started working on the program's implementation and will be announcing more information soon.
"This legislation has been one of our top priorities. It will help restore consumer confidence in the economy by stimulating vehicle sales; while at the same time benefitting the environment by replacing older vehicles with cleaner and more fuel-efficient autos," said Alliance President and CEO Dave McCurdy. "Cash for clunkers will benefit everyone from the consumer looking for the extra incentive to purchase a new car, to the communities who will receive additional tax revenue from the sales of new vehicles."
Around the world, consumers are already benefitting from similar programs, and the resulting economic stimulus has been significant. In January, Germany implemented a fleet modernization program. At the end of the first month of the program, sales in Germany were up 21% over 2008. Corresponding sales in the U.S. were down 41% for the same period. As of this writing, fleet modernization programs have been adopted in China, UK, Brazil, Spain, Austria, France, Italy, Portugal, Romania and Slovakia, and are under consideration in several others.
Details of the program including vehicle eligibility requirements will soon be found at www.cars.gov.
Reader Comments (Page 1 of 1)
steve 10:24AM (6/19/2009)
While a great stimulus for those that can afford a new car, what does this do to the second hand car market?
Did that bill just push the minimum price for any old piece of junk to 3500-4500?
A quick scan over my local craigslist auto section shows a bunch of great deals for anyone interested in buying a new car.
Has anyone read enough of the new bill to know what requirements there are on the clunkers? Can you turn up with a non running wreck on a trailer and still get the money?
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Spence 10:43AM (6/19/2009)
You have to have owned the car for at least a year, and had it registered and insured. So if you've been paying insurance on a non-operative vehicle for a year, I guess, but how many people would do such a thing?
My question is this. My car, when new, was rated 18mpg city, 22 highway. Do I qualify? I know it gets worst mileage now, but is that 18mpg cutoff for a combined official mileage figure?
Ghen 10:49AM (6/19/2009)
I know its 18mpg combined, but I don't know if it means what the car currently obtains or the official specs in the year of the manufacture. I would think that the latter is easier to enforce though as people could just lie about the former to get the extra $1000 or be entitled all together.
Elendel 3:26PM (6/19/2009)
Here is the actual text of the (House) bill, with clunker requirements:
http://www.govtrack.us/congress/billtext.xpd?bill=h111-2751&version=pcs&nid=t0:pcs:104
Hasn't been mentioned much, but the car has to be at least 1984 model year or newer.
Kevin 10:47AM (6/19/2009)
You could also say that it will reduce the price of several vehicles. Now that people will get 4500 off the price of a new car they could conceptually turn around and sell that new car and make a 2k profit on it.
Personally, I just want to know what I have to bring to the dealer. I'm thinking of selling off every usable part I can before I bring it into the dealer lot for a trade-in on a mazda5.
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Spence 11:30AM (6/19/2009)
Sorry man, a Mazda 5 will only qualify for $3500 if it is the combined mileage they are using.
As far as running or not, the idea is to get a gross polluter off the road, instead of keeping them around, so I don't know if they will really care, though there may be some language about the vehicle being operational. I don't know. I can't imagine you'd get all that much for your clunker parts.
Ghen 10:52AM (6/19/2009)
Since I work in a dealership I'm happy about the news. Not only will this be marginally good for the environment (citation needed) but it will definitely help out the economy and auto industry.
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Kumar 12:37PM (6/19/2009)
Good call on the verbal asterisk. ;)
When I cash in my '98 Dodge Durango, if I go for an Suv, then it's not so good for the environment. If I get the VW tdi wagon I've been eyeing, more so.
That provision for new cars having lower mileage if they're an suv has to be solely for the US manufacturers, since they're still so top-heavy on gas hogs. Hope it works out for them.
Mike 12:44PM (6/19/2009)
I found this argument 'against' interesting:
Found here: http://www.politico.com/arena/
Written by: Rory Cooper, Dir., Strategic Communications, Heritage Foundation:
On another subject: Cash for Clunkers
The President is expected to sign a War Supplemental bill today that included a “Cash for Clunkers” provision. This program spends $1 billion (Obama pocket change) to offer consumers up to $4,500 of incentives to purchase a more fuel-efficient car. Aside from this being yet another auto bailout disguised as a public service, this program directly impacts the poor, unemployed, veterans and the charities that serve them. Charities collect cars every year to help returning vets or families who may need to drive to and from a children’s hospital, or new job. Some Americans depend on this generosity. This program eliminates the ability for a charity to collect cars, since $4,500 is much more appealing than a small tax deduction.
And because the program is designed to get these old cars off the road; once they are turned in, they are destroyed. In other words, buying a used car just got a whole lot more expensive. With less used cars available, the remaining cars will clearly go up in price. But used car dealers aren’t counting the money yet, because the program doesn’t offer the incentives for buying used cars, only new ones. So that struggling family who was driving the gas guzzler has to take on an expensive new car payment if they want the government handout. And to all the environmentalists: how much energy is consumed by destroying and building a new car versus owning one that gets less than favorable gas mileage? In an effort to create their ideal centralized world, Nancy Pelosi and Barack Obama have spent another billion dollars on a program designed to hurt the poor, unemployed and charitable. Another great day for America.
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Serge 3:11PM (6/19/2009)
I would be curious to know how many donated cars are actually running and could be reused. As I understand it most donated cars are non-operational junk. These car donation places just chop them up and sell the parts.
If you have a running car and want to give it to a vet; just give directly. Why get the middleman involved?
Tim 1:51PM (6/19/2009)
More new car sales is why car companies spend $millions of their taxpayer paid "bailout" funds on high paid lobbyists and on campaign contributions to corrupt politicians!
Yep, politicians in your pocket and gullible Statist "progressivism" is good for business.
First these giant corporations get bailout money and tax relief, and then more sales to the people who politicians forced to pony up the bailout money and tax relief. All made possible by a private corporation know as the "Federal" Reserve Bank who can print unlimited FIAT public debt and has NEVER been publicly audited in it's 100 year history. (Support HR-1207 and AUDIT THE FED who is putting you and I in debt!)
I guess that a stronger (more) Business + Corporation partnership is Obama's "change".
All Heil, Obama! All Heil the State!
(suckers)
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joe 2:15PM (6/19/2009)
by the way if anyone is wondering what that picture is with the 8 cars impaled by the spike:
http://en.wikipedia.org/wiki/Spindle_(sculpture)
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Orangecrush 1:59PM (6/19/2009)
No doubt about it, the program is pure pork. We don't need the program at all. That being said, who would be dumb enough to leave the money if you are in the process of buying a new car and you have a piece of shi** lying around that qualifies (I don't mean your husband, wife, boyfriend, girlfriend....sheesh).
To answer some of the questions above. The combined cycle is what was on the original sticker or what the government said is the combined cycle on their website...www.fueleconomy.gov.
And no, you can't just go out and by a lumpy from someone today and try to use that vehicle. The car needs to be running, with current registration and insurance for at least one year prior. In other words, don't bring the vehicle that is in your front yard on blocks for the last 20 years. Yes, bring in your 1988 chevrolet suburban that you love and thought you would never part with. The car also needs to be newer than 1984.
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Serge 3:00PM (6/19/2009)
Crap, I parted with my dearly beloved 89 Jeep Cherokee in February after 8 years of ownership. It was still running too, albeit poorly. I guess uncle Sam saved $4.5 K on me. I still enjoy my Fit though. 36.2 mpg average after 7K miles -- awesome!
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Jon M 1:31AM (6/20/2009)
I think its a good idea overall... economic/tax policy has always been a means pushing for positive changes that the free market alone would not adopt on its own and/or to represent the 'hidden costs' that go with some goods. For instance, I agree with Elon Musk that Gas should be taxed more (as do the heads of the big three for similar reasons) to represent the additional costs of burning oil that we will not have to pay for until later. So far, we dont have a cost for 'clean air' or 'clean water' because they are still considered 'public goods', so tax policy needs to reflect the global impact that we dont pay for now.
I do see one error in logic though. I dont see why or how trading in for a new SUV with only half the improvement in mpg should qualify you for the same amount of tax credit as the regular auto... the auto will pollute less, use less gas, etc... so in the end it should have a good $1000-2000 incentive to go with a car over SUV, since the ending mpg rating will be that much better, OR have an additional incentive for people to go from a SUV to a regular car. Then (and this should also be included), people might opt to give up on a new SUV in favor of a car to get the extra credit... otherwise, going from a big old SUV to a newer one may only yeild a fraction of the benefit compared to going from an old to new car, but there is no incentive to do this that is reflected. Heck, with the way the code is written, its actually MORE attractive to stick with the SUV then, since its easier to qualify yet the reward is the same.
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Jon M 1:31AM (6/20/2009)
@Tim, you can read my last statement, but I wanted to add that your highly conservative viewpoint might not be something you want to apply with such indiscriminate judgement.
One of the biggest problems that pundits and critics are starting to talk about more and more is that perhaps with a more progressive tax/regulatory system, the current economic fallout may have never happened in the first place. Greenspan and Bush saw the 'single monopolistic private corporate market' to be beneficial... as in 'too large to fail'. However, now, it has been proven that YES, they can fail despite the incentives we gave for corporations to get so large and dominate... and now the public is charged with taking care of these companies which are 'too large to fail' (or we all suffer). With more progressive regulation earlier on, and perhaps incentives to 'stay small' rather than gobble everything up and dominate, we wouldnt have the resulting 'too large to fail' situation that we have right now. And how would we practice this 'split up the larger into smaller' policy? Well... a progressive tax system which makes companies more profitable to operate at under a certain size threshold. Perhaps one reason we have to be so 'progressive' now is because of the mess we were left with after not being 'progressive enough' earlier on... even John McCain mentioned that, along with Greenspan and other 'conservatives' (I dont think either major party is more or less conservative than the other... if you compare overall spending by Republicans and Dem's over the past decades, the 'Pubs spent more taxpayer money... the rest is 'smoke and mirrors').
Using 'All heil Obama!' as your sign off shows your ignorance and how you have been influenced by simple propaganda more than fact. The Nazis were the penultimate RIGHT WINGERS... so using one of their 'catch phrases' with Obama's name actually paints him as either right-wing, or you as clueless. At that, the Republicans have always, in history, through to this very day, shared more mutual interest and interaction with the Nazi party than any other major political party. This includes members of McCain's staff which contribute and are active members on the Nazi party. This also includes the Ford family (as in the auto family). In October 1942, ten months after entering World War II, America was preparing its first assault against Nazi military forces. Prescott Bush was managing partner of Brown Brothers Harriman. His 18-year-old son George, the future U.S. President, had just begun training to become a naval pilot. On Oct. 20, 1942, the U.S. government ordered the seizure of Nazi German banking operations in New York City which were being conducted by Prescott Bush. Prescott had been awarded honors at a dinner ceremony in Germany by Hitler himself in 1938. Many of the 'catch phrases' and tactics that current 'conservatives' in the US use to this very day were adopted from the Nazis.
If you are going to try to be clever, you need to be intelligent first. Doh! Maybe you should look up some old Lenin and Marxist slogans.
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Wondering 5:10PM (6/22/2009)
I have a question..
how does this work on leasing a car..
i mean if i have an old clunker, do i still get the credit to put towards my lease?
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Bryan 9:35PM (6/22/2009)
Few things come to mind. The vehicle I want to trade in has been under my name for years. There is a high demand for my vehicles parts and all the add-ons I have installed on it. It received an 18mpg rating new, but im getting 14 now. I plan on signing over the title to my father for him to purchase a Sky Redline 19/29mpg. Can I sign over the title since it was registered for a year or do I have to purchase the Sky under my credit?
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John M 11:32AM (6/23/2009)
Jon M. Your comments are brilliant!
You must visit these forums more often especially when the subject of hydrogen comes but the cause there is a small but very vocal group that is vociferously against hydrogen and they make it known by flooding the forums by their illogical propaganda.
It makes it very difficult when you are trying to get the real picture of what it going on with hydrogen.
I also wanted to add that with this billion dollar pledge we are only talking about 285,741 to 222,222 car maximum.
Compared to the 220 million on the roads in the US today that doesn't seem like a big dent and unless you can only use this money to buy American made cars this doesn't seem like a giveaway to the car makers that have ruined their business and gone hat-in-hand to the US government for a bailout.
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Jim Tressor 3:16PM (6/26/2009)
Here is an interesting take on why the cash for clunkers was a flop as a bill. The author of this blog thinks that the restrictions should be more stringent than they were set at. Do you agree?
https://www.mindreign.com/en/mindshare/Environmental-Concerns/Cash-for-Clunkers/sl36962308bp294cpp10pn1.html
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