House OKs Extra $2B on "Cash for Clunkers"

Popular Rebate Program Running Out of Original $1B in Funding; Initiative Still "Up and Running," White House Says

(CBS/ AP)  Last Updated at 4:55 p.m. EDT.

The House of Representatives voted Friday to rush $2 billion into the popular but financially strapped "cash for clunkers" car purchase program, heeding calls from U.S. consumers who hope to keep taking advantage of the trade-in incentives.

The bill was approved on a vote of 316-109. House members acted within hours of learning from Transportation Secretary Ray LaHood that the program was running out of money.

The program was set up to boost U.S. auto sales and help struggling automakers through the worst sales slump in more than a quarter-century. Sales for the first half of the year were down 35 percent from the same period in 2008, and analysts are predicting only a modest recovery during the second half of the year.

"This program has been an overwhelming success, allowing consumers to trade in their less fuel efficient cars for a credit to buy more fuel efficient new models," President Barack Obama said in a statement praising the House vote. "It has given consumers a much needed break, provided the American auto industry an important boost, and is achieving environmental benefits well beyond what was originally anticipated."

"I urge the Senate to act with the American consumers in mind to pass this important legislation," he added.

Called the Car Allowance Rebate System, or CARS, the program is designed to help the economy and the environment by spurring new car sales. Car owners can receive federal subsidies of up to $4,500 for trading in their old cars for new ones that achieve significantly higher gas mileage.

According to the National Automobile Dealers Association (NADA), which has conducted a survey of its dealerships, dealerships are averaging 14 "clunker" trade-ins per dealership. With 16,000 dealerships participating in the CARS program, the total number of estimated "clunker" trade-ins is 224,000, CBS News' Carter Yang reports.

House Majority Leader Steny Hoyer said the new money for the program would come from funds approved earlier in the year as part of an economic stimulus bill.

The leader of the House, Speaker Nancy Pelosi, a Democrat, alif., said the cars purchased under the program were much more fuel-efficient than the bill requires.

"Consumers have spoken with their wallets, and they've said they like this program," said Rep. David Obey, a Democrat.

Republicans argued that Democrats were trying to jam the legislation through. Some lawmakers also complained that many dealers were left to contend with a chaotic government-run program.

"The federal government can't process a simple rebate. I've got dealers who have submitted the paperwork three times and have gotten three rejections," said Rep. Pete Hoekstra, a Republican. "What is a dealer supposed to do?"

Earlier Friday, White House spokesman Robert Gibbs said Friday that the program is still "up and running," reports CBS News White House correspondent Mark Knoller.

"If you were planning on going to buy a car this weekend, using this program, this program continues to run," Gibbs told reporters. He would not commit to any timeframe beyond that.

There had been a $1 billion budget for rebates for new car sales in the program that was officially launched last week and has been heavily publicized by automakers and dealers.

The program offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle, in exchange for scrapping their old vehicle. Congress last month approved the plan to boost auto sales and remove some inefficient cars and trucks from the roads.

The Senate was not scheduled to vote on Friday but lawmakers hoped to win approval for additional funding next week.

Sen. Carl Levin, a leading Democrat, said the administration assured lawmakers that "deals will be honored until otherwise noted by the White House." But he suggested that "people ought to get in and buy their cars."

The clunkers program was set up to boost U.S. auto sales and help struggling automakers through the worst sales slump in more than a quarter-century. Sales for the first half of the year were down 35 percent from the same period in 2008, and analysts are predicting only a modest recovery during the second half of the year.

So far this year, sales are running under an annual rate of 10 million light vehicles, but as recently as 2007, automakers sold more than 16 million cars and light trucks in the United States.

Earl Stewart, who owns a Toyota dealership in North Palm Beach, Fla., said the changing messages on the program has created confusion among his customers and his staff. Stewart's accounting department also could only enter about a dozen of the 47 sales he made into the government Web site set up to handle the transactions, leaving him wondering if he will get refunded for the remaining vouchers.

With so much uncertainty surrounding the program, Stewart said he planned to continue to sell cars under the program Friday but would delay delivering the new vehicles and scrapping the trade-ins. Drivers would be put in loaners until he was absolutely certain the program was still going.

"It's been a total panic with my customers and my sales staff. We are running in one direction and then we are running in another direction," he said.

[woltommel]

I will buy American, let's see, I could use a new energy efficient dishwasher, refrigerator, furnace and air conditioner. Will I get 4500$ too.

[cattiej]

How many of these traded in clunker's are not going to be shredded but sold to some other country of someone here in our country..Reminds me of all the cars that were flooded during Hurricane Katrina, Ivan etc...they are fixed up and resold to unsuspecting people...where the heck is Obama getting the money to buy these clunkers...The car dealers have raised the price of cars several weeks ago, they were tipped off about the rebate and they want to get there's....at the taxpayers expense. God, our country is going to h***, please send us some honest politicans.
I hope Chris Dodd is miserable, I think he is a crook.

[actornaught]

You make yourself sick with all those conspiracies, don't you...

[spaceatoms]

I actually like this plan, first its definitively selling automobiles which translates to jobs and second its getting newer more efficient cars out there, third it just has an overall good feel to it where its hard to argue that it isn't good for everyone.

[fwc01]

I have a 91 Subaru "clunker" with 192k miles that I bought new because of its fuel economy and size (29 mpg highway). That was 17 years ago. I can't trade this car under this program even though I have been responsible for all these years. However my tax dollars will be used to reward folks who have been irresponsible with regard to their past purchases. Is this crazy or what!

Plus, think about all the people in our country and around the world who need these cars to go to work, start a business, etc., and we are destroying these "clunkers." Are we this wealthy?

"From each according to his ability, to each according to his need." Barack Obama, US President (paraphrased)

[whosaid1]

So...I guess the cost of "junkers" out of the junk yards has gone up....some who were in the market for a new car will "drag one down" to the dealer and get $4,500. for it,...all, on the tax payers dime....

[ram19491]

What about the people who can't afford a new car? The people that are with the record number of unemployed that might need a clunker to get a job when things get better. They're not going to be able to buy a new car to look for jobs. Unless there's another incentive plan to provide for that to. Where are all of these clunkers going. Are the dealerships able to turn around and sell them? So many questions and so few answers.

[megawhy]

The Democrats have saved us with Cash for Clunkers! What a brilliant group..they found out if you give away money people come running. They also have demonstrated how to effectively run a small program..Step 1: Give away money Step 2: Make the paperwork involved 2 inches thick Step 3: Make sure the computer system cannot handle the process. Step 4: Give away more money Step 5: Claim that the money give away was a brilliant success. Step 6: Buy more votes with more give aways.

[Joe_NY_15]

Excellent post, I think it deserves repeating over and over, until the Demo-Dolts get it

[sjc_1]

Step 2: Make the paperwork involved 2 inches thick

The Repug Congress and Dufus in Chief passed a hybrid car bill that was so thick, stupid and complicated that NO one knew what it meant or did. Perhaps you were referring to the $100,000 Hummer allowance that the Repugs and Dufus passed that paid for half of a Hummer purchase. Yeah, those were real well thought out....NOT!

[tkjayhawk]

Hmm, those complaining about the government giving money to certain segments of the population. I am single with no children and no car. But you don't hear me complaining about the tax deductions for dependents, money spent for public schools and all the infrastructure for highways. I know that although I do not benefit equally for these things directly I do indirectly.

[JEFFDUBE2]

Some poor bastard would die for one of these cars and Obama is trashing them!!!! This man is mad!!

[Liberity1776]

stickdog3,
You are NOT free!
Like a dog if you let him off the leash, in the fenced yard.
He just thinks he is free.
How about the Government taxing YOUR labor.
Add up all the taxes you pay!
How about 70 percent of what you make!
That's called slavery!

[Liberity1776]

America has become Socialist's / Communist's
So sad our Founding Father's and Veterans gave thier lives for this!
Our own Goverment is agaist the people.
There is no freedom.
We are their slaves.
The "master's" will give us health care too!

[megawhy]

In fact, you are seeing Facism from the Democratic Party and most people are too stupid to see it!

[jjjc3]

A government program that is working to stimulate the economy, and, to boot, is popular with the American public and, especially, with car dealers (employers, get it, some of you?) DUH, Senate, give them 4 billion! The American public has already decided and is willing to BUY (AND WHAT MAKE THE FREE MARKET WORK? BUYING AND SELLING!)Sorry, Neo Cons, but this is a compromise between government intervention and the free market of Adam Smith that works! Three cheers for Senator Debbie Stabenow of Michigan for her free market advocacy that drove this through the Senate. Again, Senators, especially from the South with auto manufacturing, this will benefit us all - as in the nation first!

[beaumuff]

So you don't mind paying for somebodys car on borrowed money? Give me a loan and I will get one also but I won't pay you back.

[jjjc3]

U cannot see the forest for the trees.

[iam4honesty]

by beaumuff July 31, 2009 6:09 PM EDT

Give me a loan and I will get one also but I won't pay you back



That is exactly why you're out begging for a loan.

[megawhy]

Just keep believing that because that is what you are supposed to believe. You are a good and obedient follower. Nancy loves you.

[beaumuff]

See what you don't understand is the new Geithner and Obama math. Somehow they figured out a way to make a dollar turn into a billion dollars. The new math will be brought to schools everywhere. I can't figure it out, but when I do, a new boat for me!

[Newster1]

In this July 27, 2009 photo, a woman shops for a car ...
Above her is a car that was dumped in a dumpster as a visual promotion for the .."

And that car sure didn't look like it was a "clunker" but looked like a fairly decent late model car just being scrapped, what a phenominal and outrageous waste of resources in this country, oh yes, the metal can be recycled, but lost in that hooha is the fact that fossil fuels were used up in every phase of producing that car, will be used more to recycle it, and even more wasted melting that steel down again, energy that is never recovered again. It takes a blast furnace of about 3,000 degrees to melt steel and that's powered by coal, nat gas or oil in one form or another.
People dont do the MATH! most people dont drive 100,000 miles a year!! That car shown could probably have gone another 5 or 10 years longer with no major problems. The lady probably drives a few hundred miles a month at best,she'll spend $15,000 for a new car PLUS expensive full coverage insurance for the next 5-8 years to save 10 MPG over her old car she probably drove 500 miles in a month at most!

IOW she is probably spending so to speak $10 on a car and insurance to save $2 in gas!

[megawhy]

Stop that! You are thinking and using logic. Don't you know that is not permitted in the ObamaNation!?

[beaumuff]

Pelosi said it is working, so that is good enough. 3 billon more down the drain at tax payer expense.

[megawhy]

Nancy is a goddess

[beaumuff]

Does Obama have a clause in his health care bill to insure all uninsured drivers that won't have the money for the insurance on these new cars for free?

[hungry1968-16]

Huh?

[erasmus111]

by hungry1968-16 July 31, 2009 5:44 PM EDT
Huh?


Some people are scary, eh?

[wheeljc]

ANOTHER 'TEACHABLE MOMENT'???

WOW!! Another WELL THOUGHT OUT PLAN BY TEAM OBAMA AND HIS BAND OF CZARS!!

THIS ONE DID NOT EVEN LAST FOR ONE WEEK FOLKS!!! This is really embarrassing folks ? this is the USA!! We can do better!!

And just think, this cast of clowns wants to manage your health care, and the energy you use!!

Folks, we are to blame for the mess that is being created in our economy for electing an inexperienced neophyte regarding economics ? to wit, CASH FOR CLUNKERS!

Have a little chat with your congressional representative and senator during the upcoming recess. Otherwise, we all might join the 'CLUNKERS'!!!

[mary-miami]

It seems to be a good idea, if you have the money to buy a new car. Most people who are unemployed will be stuck with their old cars for a very long time. Also, even if they find jobs, it will be difficult to have a loan approved because most of the credit will be spoiled.

[iam4honesty]

This is a brilliant move to stimulate the economy! Too bad America can't take credit for it. The idea came from Germany and it worked great over there. The government should put much more than a total of 3 billion into this program. This creates jobs, props up American manufacturing from fabrics to steel to plastics. America will use less mideast oil. Cleaner air. More jobs and saving jobs means a broader tax base. The government will recoup this money in no time. Makes a he22 of a lot more sense than tax cuts for the very wealthy.

[sjc_1]

enriquie,

Go back to Cuba, where you can experience true socialism and stop spewing the junk that you type on here. You know nothing about socialism and even less about being a real human being.

[jclark7613]

The only down side to this is that the automobile has to get 18 miles or less to the gallon... My mother van was 1 mile shy.