Huge consumer demand quickly exhausted the $1 billion in federal funds allocated to the "Cash for Clunkers" program that provides $3,500 or $4,500 vouchers to some consumers who trade in old vehicles for newer models. An estimated 250,000 Americans have taken advantage of the program already, prompting the U.S. House to vote on Friday for an additional $2 billion to extend it. All five Iowans in the House voted to fund "Cash for Clunkers" in June, but Representative Steve King (IA-05) voted no on the extra $2 billion.
Although the White House would like to extend this program, Reuters reported that the bill may run into trouble in the Senate:
One member can block a bill in the Senate and there are different interests that could pose a challenge. For instance, Energy Committee Chairman Jeff Bingaman said he opposes the House proposal because it calls for spending unused Energy Department loan guarantees on the program.
Environmental champions in the Senate have urged members to strengthen requirements in the bill for fuel efficiency and pollution control.
Energy analysts played down the impact the program would have on reducing gasoline consumption.
Conservative budget hawks could also draw the line on more help for an industry that has already received tens of billions in federal assistance.
In an ideal world, I would have liked to see "Cash for Clunkers" structured somewhat differently, but there is no question that this program has helped many people and given a slight boost to the economy. Even if the Senate does not approve the additional $2 billion, car dealers' incentives that copy the "Cash for Clunkers" approach may continue to stimulate new car purchases.
Congressman Bruce Braley (IA-01) was one of the key House sponsors of this bill, and its popularity will probably help him if he ever runs for statewide office. People who bought new cars they otherwise could not have afforded are going to remember that for a long time.
I noticed that Congressman Leonard Boswell (IA-03) is holding a public event to discuss "Cash for Clunkers" on August 4 (Stew Hansen Dodge City Jeep on Hickman in Urbandale, 9 am).
Share any thoughts about this program or stories about people who have benefited from it in this thread.