Less than one week after it launched, the Car Allowance Rebate System—or
“Cash For Clunkers“—has almost run through its $1 billion in funding. Congressional leaders scrambled Friday to extend the program before the
August recess—but Senate leaders like Dianne Feinstein of California may
be reluctant to add further money to a program many felt had lost its environmental benefits.
The House of Representatives passed a $2 billion extension in a decisive
vote, but as the bill moves to the Senate, it’s unclear whether that
amount will be changed or where the money will come from. The House legislation
aims to use funds previously designated for renewable energy projects as part of President Obama’s stimulus bill.
White House spokesman Robert Gibbs assured reporters that enough money was
left to last through the weekend. But later that same evening the National Automobile Dealers Association advised its members to suspend their participation in the program until further notice.
In a joint statement with Republican Senator Susan Collins of Maine, Senator Dianne Feinstein demanded that any extension of the program include higher levels of fuel economy improvements, as well as vouchers to help lower-income drivers purchase fuel-efficient used cars. The two Senators have also requested figures from the Department of Transportation that might shed some light on the environmental effectiveness of CARS.
Currently, consumers must trade in a car getting 18 mpg or less EPA combined city/highway rating—or SUVs and light trucks that number is 16 mpg. For a mileage improvement 4 mph, consumers can receive a voucher from the dealership for $3,500 towards a new car. An improvement of 10 mpg qualifies for a $4,500 voucher.
It remains to be seen whether the Senate will agree to Feinstein and
Collins’s demands, or if the White House is eager to reallocate such a
significant portion of the money many had called President Obama’s “Green
New Deal.” But with activists already crying foul over the original
CARS program, any permanent reallocation of renewable energy funds to
boost an industry so long at odds with environmentalists, is likely to
lead to a fight in the Senate.
An extension could fail to get out of the Senate because an unlikely coalition of fiscal conservatives and liberal Democrats aren’t interested in providing more subsidies to automakers. Senator John McCain is said to be considering a procedural block on Monday’s vote, making every Democratic vote essential to the survival of CARS. If the existing environmental benefits of the program can be both established and enhanced, as Senator Feinstein has called for, the bill’s chances could greatly improve.