‘Clunkers’ Rebates Look Likely for Another Month

By Beacon Staff

WASHINGTON – The Senate has cleared the way for a vote extending the “cash-for-clunkers” program, which offers car buyers rebates of up to $4,500 for trading in their gas-guzzlers for new, higher-mileage models, setting aside Republican opposition to the plan.

Senate Majority Leader Harry Reid said Wednesday he had several very good conversations with Republican Minority Leader Mitch McConnell, R-Ky., and there is “a significant majority” that wants to move forward with the legislation.

Reid said the Senate would have to stay in session on Friday if lawmakers wanted to make changes to the bill.

Reid had said on Tuesday that he had the votes to pass a $2 billion extension already approved by the House. The funding would triple the cost of $1 billion rebate program and give as many as a half-million more Americans the chance to grab the new car incentives through September.

Car companies have credited the clunkers program with driving up sales in late July. Most consumers are buying smaller, more fuel-efficient vehicles under the program, according to a list of the top-10 selling cars released by the National Highway Traffic Safety Administration.

The list includes Honda Civics, Toyota Corollas and Dodge Calibers. The Toyota Prius hybrid, which gets 46 miles per gallon, according to EPA estimates, is the fourth-best-selling car. There is one SUV on the list, the Ford Escape, which also comes in a hybrid model that can get up to 32 miles per gallon. With the exception of the Prius, which is built in Japan, all of the top-selling vehicles on the list are built in North America.

Many Republicans oppose the plan but McConnell predicted his party would not block a vote.

“The matter will be completed,” McConnell said.

Lawmakers hoped for a vote late Wednesday or Thursday.

Senate passage would send the legislation to the White House for President Barack Obama’s signature and assure consumers there will be no interruption in the program that has led to packed car dealerships nationwide. Vice President Joe Biden called the program “an unqualified success” as Obama officials sought passage for the extension.

“I think it would be hard to tell … the thousands of people who have just traded in gas guzzlers for more efficient cars that this is having no impact,” Biden said.

“It’s a wildly popular program,” Transportation Secretary Ray LaHood said Wednesday on CBS’s “The Early Show.”

“It’s worked very well,” he said. “In about eight or 10 days, the government has proved we can get money out the door and sell almost 160,000 cars and push about $600 million out the door in order to do it. This is a huge boost for the economy.”

Republicans still were seeking a chance to amend the House version, but Democrats were confident the bill wouldn’t be changed. Senate changes to the program would require another vote by the House, which is in a monthlong summer recess. The White House says that without new funding, the program will run out of money by Friday, which is when the Senate begins its own August break.

“Anybody who supports ‘cash for clunkers’ certainly can’t support amending the bill because then we will lose the program” until the fall, Sen. Debbie Stabenow, D-Mich., said.

“We’ll pass ‘cash for clunkers’ before we leave here,” Reid, D-Nev., said after Democrats lunched at the White House with Obama, who has vigorously pushed the extension as a much-needed boost for the economy. Asked whether he had the votes to pass the measure, Reid said, “Yes.”

Under the program, buyers of new cars and trucks can get rebates of $3,500 to $4,500 by trading in older models that are then scrapped. The popular program has allowed about a quarter-million Americans to buy new cars at time when the economy is still in recession and needs a boost in consumer spending.

The legislation would transfer $2 billion from an economic stimulus account that had been set aside to subsidize renewable energy. The new money would carry the program through September, White House Press Secretary Robert Gibbs said.

Through early Tuesday, the clunkers program had recorded 157,000 transactions worth $664 million. Eighty-three percent of the vehicles traded in were trucks or SUVs, while 60 percent of the vehicles purchased were passenger cars, for an average increase in fuel efficiency of 61 percent, Gibbs said.

Opposition to extending the program has been dissipating. One vocal GOP critic, South Carolina Sen. Jim DeMint, said Tuesday he would not try to block the legislation. And three lawmakers who wanted the program limited to the purchase of even more fuel-efficient vehicles have said they would back the plan.

Yet Democrats as well as Republicans have raised concerns. Senators in both parties have said the program costs too much. Some Democrats have argued that the program should require tougher emissions standards for the new vehicles. Republicans have said it puts the government in the bad position of picking winners and losers.

“People want to know what’s going to be next. Cash for shoes? Cash for groceries?” Sen. Richard Shelby, R-Ala., said.

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