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House to Vote This Week on Weak ‘Cash for Clunkers’ Plan

2:30 PM PDT on June 8, 2009

The House is poised this week to take up the so-called "cash for
clunkers" bill, which aims to boost the slumping U.S. auto market by
giving out tax credits of $3,500 and up to anyone who trades in a
gas-guzzling car for a more efficient model.

fein.jpgSen. Dianne Feinstein (D-CA) is backing a stronger version of "cash for clunkers". Photo: Out in Hollywood

The
plan was originally touted as environmentally friendly, given that it
would theoretically encourage the use of more fuel-efficient vehicles,
but it has long since morphed into a thinly disguised gift to the auto industry. The "cash for clunkers" deal
that the House will vote on, sponsored by Rep. Betty Sutton (D-OH),
offers money to truck drivers who improve their ride's fuel economy by
as little as 1 mile per gallon.

The likely
passage of Sutton's bill this week could be bad news for a stronger
"cash for clunkers" plan that's being promoted by Sen. Dianne Feinstein
(D-CA), who displayed welcome candor
last month in calling the Sutton plan "the auto industry's version" of
"cash for clunkers" and "unacceptable" to American drivers.

Feinstein's
proposal would require drivers to achieve a 25 percent fuel-efficiency
increase before receiving a tax credit for ditching their clunkers. But
Michigan Sen. Debbie Stabenow (D) is pushing for a trade-in tax credit that's very similar to Sutton's -- truck owners would only have to increase their fuel efficiency by 2 miles per gallon to be eligible.

The requirements for car trade-ins aren't much better under the Stabenow and Sutton plans, with a mere 4 mpg increase in fuel economy triggering the $3,500 tax credit.

If Sutton's plan wins House approval this week, Stabenow's Senate counterpart could potentially get a leg up over Feinstein's.

Meanwhile, the larger question
of whether the whole idea of "cash for clunkers" makes sense is getting
much less attention than it should. The Obama administration continues
to support Sutton's effort, despite the fact that it would give drivers
new incentive to buy trucks getting as little as 20 mpg. Doesn't this
risk undercutting the president's plan to force trucks to reach an average of 30 mpg and cars to reach 39 mpg by 2016?

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