House to Vote This Week on Weak ‘Cash for Clunkers’ Plan

The House is poised this week to take up the so-called "cash for clunkers" bill, which aims to boost the slumping U.S. auto market by giving out tax credits of $3,500 and up to anyone who trades in a gas-guzzling car for a more efficient model.

fein.jpgSen. Dianne Feinstein (D-CA) is backing a stronger version of "cash for clunkers". Photo: Out in Hollywood

The plan was originally touted as environmentally friendly, given that it would theoretically encourage the use of more fuel-efficient vehicles, but it has long since morphed into a thinly disguised gift to the auto industry. The "cash for clunkers" deal that the House will vote on, sponsored by Rep. Betty Sutton (D-OH), offers money to truck drivers who improve their ride’s fuel economy by as little as 1 mile per gallon.

The likely passage of Sutton’s bill this week could be bad news for a stronger "cash for clunkers" plan that’s being promoted by Sen. Dianne Feinstein (D-CA), who displayed welcome candor last month in calling the Sutton plan "the auto industry’s version" of "cash for clunkers" and "unacceptable" to American drivers.

Feinstein’s proposal would require drivers to achieve a 25 percent fuel-efficiency increase before receiving a tax credit for ditching their clunkers. But Michigan Sen. Debbie Stabenow (D) is pushing for a trade-in tax credit that’s very similar to Sutton’s — truck owners would only have to increase their fuel efficiency by 2 miles per gallon to be eligible.

The requirements for car trade-ins aren’t much better under the Stabenow and Sutton plans, with a mere 4 mpg increase in fuel economy triggering the $3,500 tax credit.

If Sutton’s plan wins House approval this week, Stabenow’s Senate counterpart could potentially get a leg up over Feinstein’s.

Meanwhile, the larger question of whether the whole idea of "cash for clunkers" makes sense is getting much less attention than it should. The Obama administration continues to support Sutton’s effort, despite the fact that it would give drivers new incentive to buy trucks getting as little as 20 mpg. Doesn’t this risk undercutting the president’s plan to force trucks to reach an average of 30 mpg and cars to reach 39 mpg by 2016?

  • W. K. Lis

    The U.S. Government in turn could then sell the “old clunkers” to Cuba.

  • Cash for Clunkers will put every charity car donation program in the nation out of business since the amount of the voucher would be much greater than the tax deduction. The solution is to simply allow the charity to issue the voucher instead of the tax deduction. The charity would then junk the car in accordance with the bill. This way, everyone wins, the car dealer, car maker, car buyer and the charity.

  • I’m sorry, but any plan that even the Left acknowledges is really just a means to prop up the auto industry has no business calling itself “environmentally friendly”.

    PS. Where’s the tax break for those of us who don’t drive?

  • … and we care about the charity car donation programs why?

  • clever-title

    It’s a good thing that new cars are built by magical fairies that don’t use any energy. Otherwise, “cash for clunkers” would just be substituting tailpipe emissions with smokestack emissions.

  • I am not a wild fan of “cash for clunkers,” but a really important difference in Feinstein’s version is that the “cash” could be used towards transit instead of buying a new or used car. This is huge and worth fighting for. Here are the specifics from Feinstein’s website:

    “The bill specifies that during the first year of the program, vouchers will be issued for the following amounts:

    * For traded-in vehicles that are model year 2002 and later, drivers would receive a voucher for:
    o The purchase of a new vehicle: $4,500
    o The purchase of a used vehicle: $3,000
    o Transit fare credit: $3,000
    * For traded-in vehicles that are model year 1999 – 2001, drivers would receive a voucher for:
    o The purchase of a new vehicle: $3,000
    o The purchase of a used vehicle: $2,000
    o Transit fare credit: $2,000
    * For traded-in vehicles that are model year 1998 and earlier, drivers would receive a voucher for:
    o The purchase of a new vehicle: $2,000
    o The purchase of a used vehicle: $1,500
    o Transit fare credit: $1,500”

    So we could potentially get cars off the roads and turn people into transit riders. This is way, way, way better than the pathetic bill going down in the House. On this one, I think Feinstein deserves our full-throated support.

  • Larry Littlefield

    “Giving out tax credits of $3,500 and up.”

    Can you imagine the outrage if someone proposed a $350 credit for a bicycle outfitted for commuting, related rain jacket and pants, locks and pannier for office clothing?

    Or even a $350 line of credit to ensure bike shops will not be stuck with a loss if they weren’t bought.

    In response to our health problems, I’d bet you are more likely to see a $5,000 credit for a car and a $1,000 credit for a stationary exercise machine.

  • Feinstein’s bill is a step in the right direction, but why not also just write a direct check to anyone who trades in their “clunker”? There are plenty of people who would sell their hoopdie and start using other forms of transit if they had an incentive to do so.

    The $1,500 tax credit for transit is not at all an incentive to the large number of people, especially urban residents, who would walk, bike or carpool (or occasionally hop a bus) more often if they had a good reason to ditch their car.

  • Larry Littlefield

    The cash for clunkers plan would used borrowed federal money.

    Interest rates are already starting to soar from the federal government borrowing so much. And Bernanke and Obama have already said that Social Security and Medicare benefits will have to be cut — for future generations — to prevent an economic meltdown. Republicans, having pushed through a massive Medicare expansion for today’s senior citizens, are also saying the debt means we can’t provide any universal health benefit to younger generations. This is what they can’t afford.

    And they want to borrow money so those who already have cars can get new ones.

    Any decision to spend money on A means less money for B, C, etc. Any decision to spend money now without paying for it means younger generations will be poorer. If people are unwilling to look at any proposal like this in such a context, no wonder we are heading for an institutional collapse.

  • Hi, 

    Brilliant post guys………………

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