House Approves Additional $2B for 'Cash for Clunkers' to Continue

Lawmakers hope the money will be enough to keep the program afloat, for now.

ByABC News
July 31, 2009, 7:19 AM

July 31, 2009— -- The House hurriedly passed legislation today to add $2 billion in funding to the "Cash for Clunkers" program.

The vote was 316-109, and the bill now goes to the Senate, which remains in session for one more week. But the Senate will have to pass the exact same bill since the House goes into recess today and will not be around to participate in a conference to hash out differences.

President Obama praised Congress for its quick action and said he was "pleased with the progress" made in the House.

The program "has succeeded well beyond our expectations and all expectations, and we're already seeing a dramatic increase in showroom traffic at local car dealers," the president said in short remarks today about the economy.

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The program pays consumers cash vouchers if they trade in their gas-guzzling cars for a new car.

During the debate, many Republicans expressed their support for the program but said the government needs to fix several problems, including an online redemption system that has been overwhelmed by dealers trying to file claims.

But other GOP members were not so supportive.

"The auto industry does not have a monopoly on the hard times in this country," said Rep. Jeb Hensarling, R-Texas. Referring to the struggling chicken farm in his district, he proposed that the government should start a "'Cash for Cluckers' program and pay people to eat chicken."

Democrats argued that the program works in stimulating the economy and promoting environmentally-friendly vehicles.

The initial money allocated by Congress has disappeared so quickly is because "it is a sign that not only the program works ... but it's ... providing a meaningful jolt to our economic recovery efforts," said Rep. John Dingell, D-Mich.

Officials were working hard to gather money for the program, which has been so successful that the $1 billion allocated for it ran out within a week.

The $2 billion will be transferred from an untapped stimulus program, so technically, no new taxpayer money will be involved. But Obama today said that the government would work to replace the stimulus funding being used to extend the program.

Earlier today, the White House assured Americans that the "Cash for Clunkers" program "is up and continuing to run," at least through this weekend.

The developments came one day after conflicting government announcements that the program was broken and may, or may not, be suspended.

"We hope a lot of people go this weekend to... look at buying a new car," White House Press Secretary Robert Gibbs said. "We think that incentives are good for them."

"The administration is comfortable and confident that the money -- the previous money that was allocated through the supplemental appropriations is enough to cover those transactions and to continue operating the program," he said at his daily press briefing.

There are roughly 20,000 certificates waiting to be processed, but the White House could not definitively say if the money is totally tapped out.

House Speaker Nancy Pelosi, D-Calif, said an estimated 250,000 cars have been sold through the program.

"It's something we believe can, should and will be extended." Gibbs said, calling it a success for car buyers, dealers, companies and taxpayers, "who are seeing people choose more fuel-efficient cars."

He said the president not only wants the program to continue, he wants to see it expanded.

Lawmakers earlier today urged their constituents to take advantage of the program -- while it lasts -- and there was obvious uncertainty in Washington about the long-term future of the program.

"We don't know how long it will last, so people should go to their car dealers now if they want to take advantage of the program," Sen. Carl Levin, D-Mich., said in a statement. "We're also going to seek additional funding to hopefully make the program last longer."