"Cash For Clunkers" Bill Hits Speed Bump

Sen Dianne Feinstein, D-Calif., on "Face The Nation." CBS

Legislation that would give car buyers a government voucher up to $4,500 when they trade in gas guzzlers hit a speed bump in the Senate amid concerns that a compromise between the White House and House Democrats doesn't go far enough to protect the environment.

Sen. Dianne Feinstein, D-Calif., who authored the "cash for clunkers" bill in the Senate, said Wednesday that she can't support the compromise announced last week after House Democrats met with President Barack Obama on global warming.

"Essentially what it means is that perfectly good vehicles would be scrapped, so that vehicles with below average fuel economy could be purchased," Feinstein said.

The program is supposed to serve two purposes: Help the struggling automobile industry and the environment by replacing gas guzzlers with more fuel efficient autos.

Under the compromise, car owners could get a voucher worth $3,500 if they traded in a vehicle getting less than 18 miles per gallon for one getting at least 22 miles per gallon. The value of the voucher would increase to $4,500 if the mileage of the new car is 10 miles per gallon higher than the old vehicle.

But Feinstein referred to the compromise as the "automobile industry's version."

"American taxpayers have already pledged $33 billion in bailout funds to this flagging industry without any special considerations for achieving greater fuel economy," Feinstein said. "This is unacceptable."

Feinstein's opposition could lead to more behind-the-scenes negotiations in the Senate where Majority Leader Harry Reid, D-Nev., said he would like to move quickly on a bill. Some lawmakers, such as Sen. Debbie Stabenow, D-Mich., have expressed support for a bill like the one moving through the House. But Sen. Susan Collins, R-Maine, said she agrees with Feinstein that the House bill doesn't do enough to generate fuel savings.

"Federal support for purchasing new cars must also promote greater fuel efficiency as a way to reduce our dependence on foreign oil," Collins said. "The House agreement announced last week does not achieve that goal."

Under the House bill, owners of small trucks and SUVs face even a lower threshold than car owners to get a voucher. They could get a $3,500 voucher if their new vehicle gets at least 2 miles per gallon more than the old truck or SUV. The voucher increases to $4,500 for a difference of at least 5 miles per gallon. For larger trucks, the new truck only has to exceed the fuel efficiency of the old vehicle by 1 mile per gallon to generate a $3,500 voucher.

An analysis from the American Council for an Energy Efficient Economy projects that the House bill would lead the average program participant to use 133 fewer gallons of fuel per year. Meanwhile, Feinstein's legislation would lead the average participant to save 306 gallons a year.
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