Editor's Note: On June 18, the Senate passed the Bill. It's now goes to President Obama, who is expected to sign it into law. The Bill provides $1 billion from July through November. The bill could continue beyond that, but requirements may be raised as requested by Senator Diane Feinstein (D-CA) who sponsored a more effective Clunkers bill.
The House of Representatives passed H.R. 2751, the "Cash for Clunkers" bill by a vote of 298 - 119.
Although the Bill started out as a way to get gas guzzlers off the road, it ended up as a method of boosting car sales for desperate auto makers ... at taxpayer expense.
The House Bill, which provides $4 billion for one year, goes like this:
Turn in a passenger car that gets 18 mpg or less and buy a new one that gets at least 22 mpg and you can get a voucher worth $3,500; if the new car gets 10 mpg more, you get a $4,500 voucher.
If you turn in a SUV or light truck that gets 18 mpg or less and buy a new one that gets just 2 mpg more, you get a $3,500 voucher. If it gets 5 mpg more, you get $4,500.
What does this bill do for the environment? Is it worth bothering with? Does it really encourage people to buy fuel efficient cars?
Feinstein's companion bill in the Senate would have been much tougher, providing $2500 vouchers for trading in a car rated at 17 mpg or less and buying a new car that gets at least 24 mpg; $3500 for a 10 mpg gain in efficiency; and $4,500 for a gain of 13 mpg or more.
Critics of the bill question whether people will buy vehicles at all with a 9.4% unemployment rate, and whether the voucher would exceed, or even equal, the regular trade-in allowance dealers would offer for old cars. Worst of all, it provides incentives for people to turn in their car and buy another gas guzzler.
Supporters say the program would take a million gas-guzzling cars and trucks off the road in a single year. The Congressional Budget Office estimates its likely to result in about 625,000 new car sales.
Sen. Judd Gregg (R-N.H.) says it will add to the federal debt (the funds come from the stimulus bill) for only a marginal improvement in gas mileage.
"If this bill were really about environmental concern, and not cementing government's nationalization of the automobile industry, it would not be paying for vehicles that get fewer than 20 miles to the gallon," Gregg said.
Also, the bill doesn't require that new cars be made in the U.S.
