Obama signs $2B cash-for-clunkers extension

— -- President Obama signed into law Friday morning legislation bolstering the popular cash-for-clunkers program by giving it an extra $2 billion in hopes of extending a wave of trade-in deals that buoyed car sales and boosted demand for fuel-efficient vehicles in July.

The Senate passed the bill Thursday by a vote of 60 to 37.

Obama welcomed the extension of the "cash for clunkers" auto sales incentive, saying it would aid economic recovery and help the troubled auto industry. The law extends the program until Labor Day, the first Monday in September, and prevents the 2-week-old incentives from running out.

Some skeptics say the additional money won't have the same impact as the first $1 billion, because many people who qualified for the program already have bought new cars and the supply of eligible vehicles is waning.

The House already had approved putting $2 billion more into the program, which gives consumers up to $4,500 in federal subsidies for trading in cars that get less than 18 mpg and buying new cars with better fuel economy.

Supporters of the program have hailed its effect on the auto industry, which had its best month in nearly a year in July, and on reducing carbon emissions.

"The reality is this is a program that has been working," Sen. Debbie Stabenow, D-Mich., said. "Consumers believe it's working. Small-business people believe it's working. People who make steel and aluminum, and advertisers … and everyone who's involved in the larger economic impact of the auto industry believe it is working."

The legislation had its share of Senate critics, most of them Republicans.

"What we're doing is creating debt," Sen. Judd Gregg, R-N.H., said. "The bill to pay for those cars is going to come due on our children and grandchildren."

The Transportation Department said the program's initial $1 billion probably has been spent. But a paperwork backlog has prevented an accurate accounting. The auto industry has estimated an additional $2 billion is enough to help consumers purchase half a million more new cars.