Will Cash For Clunkers Crash and Burn in the Senate?

By Sadie Bass

Aug 4, 2009 12:37pm

ABC's Charlie Herman reports from New York: Talk about a stalled vehicle. If the Senate does not act fast, perhaps the most visible and most successful stimulus program to date, the Cash-For-Clunkers program, will run out of money and come to abrupt stop three months before the expiration date. In the wreck that follows will be confused car buyers, disappointed dealers and upset auto manufacturers that could see sales come to screeching halt after zooming upwards in July.   The House hurriedly approved Friday of last week an additional $2 billion in funding to augment the original $1 billion for the program.  Officially known as the “Car Allowance Rebate System” or CARS (which came first?  The acronym or the actual program name?), it started on July 24 and car buyers apparently sped to dealerships not just to kick some tires but to buy.  Auto manufacturers released sales data for July yesterday and directly credited the program with revving up sales.  For the first time in two years, Ford had positive sales compared to a year ago.  Even struggling automakers General Motors and Chrysler saw sales improve from June to July. But many in the Senate think the bill is a lemon and not the way to stimulate the economy. My colleague Zach Wolf reported Monday that three Senators who objected to providing more funds to the program – Senators Feinstein, Collins and Schumer – did a u-turn after information from the Transportation Department that indicates car buyers opting for new vehicles with significantly higher mileage, one of the goals of the program.  Their support might help get the additional funding approved.  Nothing is guaranteed. So the Senate, the immovable object often described as the world’s greatest deliberative body, is crashing up against the unstoppable force of car buyers, makers and sellers who want to the program to continue.  That and plans for Senators to go away for their August recess later this week.

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