Brakes put on 'cash for clunkers' plan
— -- The government suspended the explosively popular "cash for clunkers" program, fearing it would go broke before it could pay what it still owes dealers for a huge backlog of sales, according to congressional offices and a dealer group.
Suspension of the program was confirmed by Bailey Wood, legislative director for the National Automobile Dealers Association (NADA), which had been called Thursday night by the National Highway Traffic Safety Administration, which administers the program. Rep. Candice Miller, R-Mich., confirmed as well, saying she had been told by congressional leaders.
However, White House spokesman Robert Gibbs said later that the administration is "evaluating all options" and not suspending the program, causing confusion about its status.
Said Wood: "Obviously the program has been an immense success in stimulating automotive sales."
"The thing has exploded. It has exceeded everyone's expectations," said Miller, who was involved in writing the original legislation, known as CARS, for Car Allowance Rebate System. "Throughout our history, it has been auto sales that have pulled us out of recession. People are more likely to buy cars than houses. Not to be too Pollyannaish, but we're gettin' our mojo back. This could be the pivot" that begins an economic recovery.
The White House said Thursday night that "dealers and consumers should have confidence that all valid CARS transactions that have taken place to date will be honored."
As of late Thursday, the government had committed nearly all of the program's $1 billion, according to calculations by NADA and various congressional offices. It's unclear whether and how the CARS program could be restarted.
"We're in a full-court press trying to get more cash for 'cash for clunkers'," Miller told USA TODAY Thursday night — pointing out she wanted $4 billion for the program, not the $1 billion that was appropriated.
CARS sponsor Rep. Betty Sutton, D-Ohio, who wanted $4 billion, got the news from Transportation Secretary Ray LaHood Thursday night, according to Sutton's chief of staff Nichole Francis Reynolds. Reynolds said, "The program's spent $150 million and has another $800 million to $850 million in (pending) obligations… This is one of those programs you can really see working." She says CARS has "overwhelming support" and Sutton was pressing to free more money to continue the program.
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