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Cash for Clunkers

Federal Government Racing to Give $2 Billion More for Cash for Clunkers

11:19 AM PDT on July 31, 2009

The "cash for clunkers" rebate program, which promises new auto buyers up to $4,500 for fuel-efficiency upgrades as small as 2 miles per gallon, is back to life after burning through $1 billion in taxpayer money.

Minutes
ago, the House approved $2 billion more in auto rebates by transferring
cash that was already headed for loan guarantees at the Department of
Energy -- averting the need to add the new spending to the deficit. The
vote was 316-109.

The last-minute race to keep auto-industry benefits alive, which President Obama is strongly backing,
now moves to the Senate. A bipartisan group there is already
threatening to oppose new "clunkers" money unless its fuel-efficiency
requirements are improved and used cars are approved for purchase
rebates.

Right now buyers can get
a $3,500 discount on new cars that get as little as 22 mpg. Small truck
buyers are only required to improve 2 mpg to receive the same rebate,
achieving a combined city and highway efficiency of 20 mpg.

An
early version of the plan would have allowed the rebate value to be
taken in transit coupons, but the DOT said earlier this week that no
such option would be available.

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