Dems race to add more cash to clunkers account

House Democrats raced to dump more cash into the wildly popular “cash for clunkers” program as auto dealers reported consumer interest would soon drain the account.

House Appropriations Committee Chairman David Obey (D-Wis.) introduced a bill granting the administration permission to transfer $2 billion to the program from economic stimulus funds in Energy Department accounts. The full House was expected to vote on the bill before leaving for August recess on Friday, a Democratic House aide said.

ADVERTISEMENT
The money would be in addition to the $1 billion Congress already appropriated for the trade-in program in the wartime supplemental deal.

Car and truck sales plunged when the economy fell into a deep recession, and auto-state lawmakers looked to the cash-for-clunkers program to revive the ailing sector.

Under the program, drivers get vouchers worth up to $4,500 to put toward the purchase of more fuel-efficient cars and trucks when they trade in older, less efficient models. The value of the voucher varies according to the fuel efficiency gains from the new purchase.

Officially, dealers have sent $40,000 in voucher applications to the federal government. But car dealers did a survey this week that suggested there will soon be 200,000 more requests. The $1 billion was expected to cover only around 250,000 car and truck sales.

The White House said Friday that the program will be up and running at least through this weekend and would be continued as soon as lawmakers find more money for it.

"By all accounts, this program appears to be a success for car buyers, car dealers, for car companies and for taxpayers who are seeing people choose more fuel-efficient cars," spokesman Robert Gibbs said.

White House officials, members of the Department of Transportation and lawmakers from both parties are meeting Friday to find funding sources, Gibbs said.

With the Obama administration backing an extension of the program, Sen. Carl Levin, a Democrat from Michigan, urged consumers to keep buying cars.

"We don’t know how long it will last, so people should go to their car dealers now if they want to take advantage of the program," Levin said in a statement. "We’re also going to seek additional funding to hopefully make the program last longer.”

But one potential bump in the road also emerged to the extension. Coastal-state senators say the price of a new cash-for-clunkers program will be stronger fuel efficiency standards in follow-on efforts.

On news that new car shoppers had already drained the clunkers account of cash, Sens. Dianne Feinstein (D-Calif.) and Susan Collins (R-Maine) said they would seek to require consumers to buy vehicles at least two miles per gallon more fuel-efficient than under the current trade-in program.

“We believe that any extension of the ‘cash for clunkers’ program must go further in advancing the goals of better fuel efficiency and greater emissions standards,” Feinstein and Collins said in a statement.

An auto industry source said carmakers would fight that effort. "It would create confusion for consumers and dealers to change the program's parameters mid-stream,” the source said.  “Doesn't make sense."