Cash for Clunkers Gains Senators' Support

But obstacles remain to getting needed funding cleared by Senate before recess.

August 03, 2009, 9:58 AM

WASHINGTON, Aug. 3, 2009 -- There was new hope for the Cash for Clunkers program late today, when two senators lifted their objections to an emergency bill passed by the House of Representatives last week to pump for funding into the popular program.

While many roadblocks still remain, with the blessing of senators Diane Feinstein, D-Calif., and Susan Collins, R-Maine, passing a clunkers refill by the end of the week suddenly seemed a lot more likely.

Feinstein and Collins had opposed extending the bill unless the fuel efficiency standard for eligible cars was raised. They said they changed their minds because, on average, people who have taken advantage of the program have bought cars that get 9 miles per gallon better gas mileage than the clunkers they traded in, which was better than expected.

As it rushed to get out of town for the August recess, the House voted last week to add $2 billion to keep the Cash for Clunkers program afloat.

But the Senate, in session for one more week, hadn't seemed to be in much of a hurry, and that alone is enough to put the program's future in doubt.

Republicans are poised to challenge the Obama administration's request for additional funding for the program.

Sen. Mitch McConnell, R-Ky., suggested on the Senate floor today that the plan is another type of taxpayer bailout for the auto industry and questioned why the program should get billions more dollars, "before anybody even had time to figure out what happened to the first billion."

The GOP senator called the program another example of "the administration's tendency to miss the mark on economic estimates."

The program, which pays consumers cash for trading in gas guzzling cars for fuel efficient new cars, turned out to be wildly popular. Officials now say without more funding the program will be out of cash by midweek.

"I think if it doesn't happen this week, it's unlikely that we'll make it to the weekend with a program that can continue," said White House press secretary Robert Gibbs during the White House briefing today. Gibbs estimated that an additional $2 billion in funding could stretch the program through September.

Crunching the Clunkers Numbers

Citing unreleased National Highway Traffic Safety Administration data given to their staffs, Feinstein and Collins said consumers taking advantage of the clunkers program have bought more fuel efficient vehicles than they had to.

"The statistics are much better than everyone thought," Feinstein said during a Capitol Hill press conference. "It's much more fuel efficient than anyone thought it would be," she said.

Feinstein and Collins, two original sponsors of the measure, were frustrated when its fuel economy requirements were watered down and last Friday demanded tougher fuel economy requirements in order to pass the legislation.

But they pointed to numbers given to their offices by the NHTSA, which showed that of the 120,000 sales so far, the average fuel economy for a purchased car was 25.4 mpg. For cars it was over 28 miles, for SUVs over 21 and for trucks over 16.

While 34 percent of consumers receiving the credits bought SUVs and minivans, Feinstein said 83 percent of the vehicles turned in were trucks and SUVs, and the average refund being given was $4,327. She said NHTSA expects another 130,000 cars can be bought through the program before it reaches $1 billion.

Collins said she had urged GOP leaders to work with Senate Majority Leader Harry Reid, D-Nev., to come to an agreement to allow a vote to occur this week. All senators must agree to the vote for it to happen. But with a summer recess looming, peer pressure against objecting could be high.

Sen. Charles Schumer, D-N.Y., who also appeared at the press conference with Collins and Feinstein, said he expected any vote on the clunkers bill passed by the House would require 60 votes.

"The bottom line is if it ain't broke, don't fix it," Schumer said, making full use of car metaphors. "It's working in every way. It's working as a stimulus, it's working to help families, it's working to improve mileage. What we need to do here is not put on the brakes, but step on the gas."

Senate Faces Looming Deadline

Backed by the president, more money for the car incentive plan can be reprogrammed from stimulus funds, but unless there is unanimous consent in the Senate -- that is, unless every senator agrees -- it will take at least three days to get a bill on the schedule and the Senate's August recess is due to begin Friday.

But some liberals still think the mileage requirements are too lax and conservatives, including Sen. John McCain, R-Ariz., say the program is a boondoggle and amounts to another bailout of the auto industry.

Already on the Senate's plate heading in to August recess is the confirmation of Supreme Court nominee Sonia Sotomayor and a tourism-promotion bill that is one of Reid's top priorities.

However, even if the Cash for Clunkers bill were to make it to the Senate schedule this week, the program may be completely out of money. At that point, if any of the amendments expected to be offered pass, the newly-amended program would have to be reconciled with the bill that passed the House of Representatives who have already adjourned for August recess.

On C-SPAN Sunday, Transportation Secretary Ray LaHood said he had "great faith" that the Senate would pass the bill.

"We will continue the program until we see what the Senate does," he said. "I have great faith that the Senate will pass this."

The White House has assured dealers that they will be reimbursed for any deals closed over the weekend, but, in the meantime, car dealerships that continue to offer the government's incentive are doing it on faith.

In Friday remarks about the economy, Obama said 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."

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