House Votes To Extend Clunkers Program

The Cash For Clunkers Program or CARS (Car Allowance Rebate System) received a major vote of confidence on July 31 when the House overwhelmingly voted to inject $2 billion into the enormously popular program.

The car stimulus program was granted $1 billion, and went into effect July 24. It was meant to last to Nov 1 or 'when the funds were exhausted'. Who would have thought that would be not much more than a week?

"The Senate, which will be in session (the first week of August), will take up the program then. A spirited debate is likely, as some senators have said they will use the opportunity to push for tougher fuel-efficiency requirements. If the Senate does not go along with the House's version, the House might have to return to work on a compromise.

The sudden legislative action was prompted by the overwhelming response to the program, formally known as the Car Allowance Rebate System which its backers say has helped not only car buyers but the struggling automobile industry."

President Obama has indicated his support for extension of the program. At this time, it is not known when the original $1 billion will be exhausted.

Thanks to New York Times Direct - Political Email

Full Story: House Votes for $2 Billion Fund to Extend ‘Clunker’ Plan

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Comments

Irvin Dawid's picture
Correspondent

Clunker Program Boosts Ford Sales

In one of the first tangible facts showing how effective the popular program is, the WSJ (August 2) reports Ford Sees First Monthly Sales Increase In Almost 2 Years‏: "The increase (in July sales) was the first reported by any of the six largest auto makers since August 2008 and the first bump up for Ford since November 2007, analyst George Pipas said, adding that the "Cash for Clunkers" program provided the company a boost."
Irvin Dawid, Palo Alto, CA

Popular yes... but effective?

I would hesitate to characterize this program as effective. Popular yes, Americans are smart enough to take free goobermint cheese when it is handed to them... especially when they were already in the market for new car. It's just a likely that people who were going to buy a new car anyhow in May and June simply delayed their purchase until July, thereby causing the "sales increases". As with all government stimulus, everyone that pays taxes gets screwed while wealthier folks (poor people do not buy new cars) and government connected firms (or owned in this case) get the bennies.

I actually looked at this program myself as I have a "clunker" (95 Ford Explorer with 155k miles). But the additional expense of a new car was more than I was willing to pay as there's not a car out there I find myself particularly wanting... plus in, CA our silly sales tax rate eats up most of the "free" money anyhow. I didn't go through with it as I don't need a new car, but I can certainly see why people did.

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