LaHood: 'Cash for clunkers' will be suspended next week if the Senate doesn't act

The "cash for clunkers" program will have to be suspended next week unless the Senate acts to authorize a $2 billion extension for the program, Transportation Sec. Ray LaHood said Sunday.

"If we don't get the $2 billion from the Senate...we would have to suspend the program next week," LaHood said during an appearance on C-SPAN's "Newsmakers" program.

LaHood said he expected the additional money for the rebate program would fund trade-ins of old autos for more fuel efficient vehicles through Labor Day.

"We believe the $2 billion we're very hopeful the Senate will pass this week...will take us through the time that Congress gets back after Labor Day," the former Illinois Republican congressman asserted.

Extended funding for the program passed the House this week by a strong, bipartisan margin, but may face more obstacles in the Senate. Sen. John McCain (R-Ariz.) has signaled he may filibuster the bill, and a key Rust Belt Democrat, Sen. Claire McCaskill (Mo.) has already said she's disinclined to support the bill.

Furthermore, Sens. Dianne Feinstein (D-Calif.) and Susan Collins (R-Maine), two of the authors of the initial "cash for clunkers" legislation, asked LaHood for more data on the cost and extent of the environmental impact of the program before the Senate reauthorizes the program.

"If the Senate does not pass the additional $2 billion, the program will get suspended," LaHood cautioned, while also asserting that the environmental standards contained in the first program should be left alone.

The Transportation secretary said that additional purchases using the vouchers will be continued throughout the week until the Senate acts.

If the Senate doesn't act in time, LaHood said the Obama administration would evaluate other options to extend the program.

"I think the conclusion is that the TARP money cannot be used for this," he said, adding that the administration has been evaluating redirecting other federal spending to support the program.

LaHood also defended the effectiveness of the program as one of the most stimulative bits of government spending embarked upon by the White House and Congress.

"It is probably the one real stimulus part that has worked very, very well," he said.