By the time Cash for Clunkers becomes law, George Jetson will be able to get a $3,500 voucher.
Cash for Clunkers hit a speed bump Tuesday, June 16, 2009, in the U.S. Senate. It appears some Senators have “bailout fatigue” in general and “auto industry bailout fatigue” in particular. According to The Detroit News, Republican Senators are pushing back, citing the $85 billion in aid already provided to prop up ailing and bankrupt GM and Chrysler. Some Democrats, including Diane Feinstien (D-California) also oppose the bill in its current form because they think it does not go far enough to improve fuel economy of vehicles on American Roads. As reported earlier in Examiner.com, a Cash for Clunkers provision was added last week to a $106 billion bill to fund the wars in Iraq and Afghanistan. The idea was to attach a Cash for Clunkers provision to an existing bill already moving through the Senate so quick passage could be assured. Wrong.
A billion here, a billion there…
The initial Cash for Clunkers legislation provides $1 billion to get the program started, though the total needed is closer to $4 billion. The remaining funds would be appropriated from next year’s budget. Pretty soon it adds up to real money.
Why elections matter
Senators who support Cash for Clunkers need 60 votes to keep the Cash for Clunkers provision from being removed from the wartime funding bill. That could prove to be a problem. According to The Detroit News, even though Democrats control the Senate (they hold 58 seats), two key Democrats, Senator Edward Kennedy (D-Massachusetts) and Robert Byrd (D-West Virginia), will be unable to vote due to poor health. With opposition from Senate Republicans who are upset over deficit spending, and Diane Feinstien's (D-California) opposition because of fuel economy considerations, Cash for Clunkers is still in play and anything can happen.
A quick review of Cash for Clunkers
Cash for Clunkers would provide a voucher of “up to” $3,500 or “up to” $4,500 toward the purchase or lease of a new, more fuel-efficient vehicle. To get a $3,500 voucher on a new car, it would have to achieve a four-mpg improvement; to qualify for $4,500, a ten-mpg improvement is needed. The car being traded must get 18 mpg or less. Pickup trucks are included, provided they achieve at least 18 mpg and the new truck gets 2 mpg better than the truck being turned in. A pickup must get five mpg better than the truck being turned in to qualify for the $4,500 voucher. There is no firm word yet if there will be a made in America or made in North America eligibility requirement in the final version of the bill.
Here's a question for you:
One of my readers asked an interesting question: Why should Cash for Clunkers provide vouchers only for new cars when millions of people can't afford new cars, and plenty of old cars get good mileage. Here's a perfect example: I am driving a 1999 Mercury Cougar that gets 34 miles per gallon on the highway. (I just made a round trip from Detroit to Gary, IN and I checked the mileage.) What if someone were to turn in their 1993 Buick Roadmaster and buy a car like my 1999 Cougar? Shouldn't that person get a voucher? It depends on what the true purpose of Cash for Clunkers really is. Is it to save Detroit? Reduce consumption of gasoline?
Read more about it:
Is your car officially a clunker? Enter your car's info in The Detroit News database to find out.
Is Cash for Clunkers a clunker of a deal for taxpayers?
www.Cashforclunkers.org
Q&A on how Cash for Clunkers would work.
Cash for Clunkers passes in U.S. House
The EPA's official site for fuel economy figures: www.fueleconomy.gov
Photograph: Mike Karagozian. Follow me on Twitter
Comments
How about a more typical clunker - like a 1994 Mercury Cougar?
Robert Byrd is NOT a senator from North Carolina. So which senator is it?
The database you include is inaccurate. If you want to know if your car qualifies go to fueleconomy.gov. This site is the official site that will determine if your car qualifies if the bill passes (and that's a big if). Check fueleconomy.gov for a 1993 Ford Ranger, 2WD, 3.0L, 6 cylinder auto. The bogus database attached to this article claims the combined MPG is 19 (would not qualify). Fueleconomy.gov shows 18 (would qualify). The same is true for my 1998 Dodge Caravan, 3.3L, 6 cylinder, automatic. The bogus database shows 19 for this as well. Fueleconomy shows 18. What a terrible article.
I would rather this $1 bn go towards weapons and paying off local clerics in Afghanistan than to Americans who want new cars. Let's be realistic about things. The gov't should be doing NOTHING to help GM move cars off lots, even though it owns 60% of GM. Who does the president think he IS? Merlin the Magician? Wave a wand and Republicans and four Democrats will change their minds about things? He may be an intelligent, charismatic leader who actually speaks in public (and in Muslim countries), but just because he graduated from Harvard doesn't mean he can sneak in $1 billion dollars under the American public! We are too smart for this guy.
I was extremely excited about this bill, until I found out it was for new cars only. The majority of people that drive clunkers, do so because they cannot afford a new car. As long as the car meets the mpg qualifications who cares if its new or used, if that was the governments only concern!
Do I have to use the voucher on a GM or Chrysler? Can I use it on an American made Honda?
This a terrible bill. It would hurt more people than it would help. Car makers just need to be like real business owners, if it doesn't sell , then lower the price until it does or go away.
There are many people that can't afford a car for $3000 or more. The bill would make all cheap cars worth $3500 or more just for a trade in on a new one. How about the teenagers and their first cars? How about the working family that needs a cheap car to get a job, church or store? What about the senior citizen on a fixed income?
How about the HUGE aftermarket that make replacement and performance parts for the older cars? That alone is a multi-billion dollar work force.
I am a car collector, millions of us are out there and love cars for the nostalgia or personal preferences.
There a whole lot more that will be effected than the foolish politicians are seeing.
Wah Wah, says GM Ford and etc. Get a clue, NOTA BAILOUT OR HANDOUT.
Gene from Michigan
I think the idea is a good one. It gets old driveway queen vehicles off the road, and helps motivate manufacturing, while giving citizens a tax break. But the current implementation is flawed. Why have a 18mpg max on the vehicles traded in, and punish those who made responsible choices years ago? Why is there a vehicle age requirement, 1984 or NEWER?
The bill should be is a straight ratio of the percent improvement in fuel (C02) efficiency to dollar value of rebate. That should be the main specification of the bill. For example, say the max rebate is $5000 and the upside limit of the mpg improvement is 10 mpg, you would get all $2500 if you increased your mpg by 5 mpg and all $5000 if you improved by 10 mpg.
So if you are like me, and have an old car that gets 22mpg and you want to buy the new Ford Fusion Hybrid 40 mpg, then you get the max rebate.
As the bill stands, I want to trade up but can't b/c my old diesel car gets too good a fuel economy! So I will just keep driving
So, I have a 1977 Chevy Caprice (V8), that gets 12 MPG in a good week. By this bill's definition it isnt a "clunker" times 2!
1) my car is over 25 years old - Not a Clunker
2) My car was rated (when built) as getting 20 MPG. Not a clunker.
If this plan isn't for me then who is it for???
FORD IS DOING QUITE,THE PROBLEM WITH THE CASH FOR CLUNKERS ON USED CARS IS THERE ISNT A FIXED PRICE LIKE THERE IS ON A NEW VEHCILE. THE GOVT WOULD NOT BE ABLE TO REGULATE OR CONTROL SALES PRICES AND CONSUMERS WOULD PAY A HECK OF ALOT MORE THAN THE VEHICLES WORTH THROWING THE USED CAR WORLD IN A SALES SPIN
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