Congress Refuels 'Clunkers' Program

By Dana Hedgpeth and Perry Bacon Jr.
Washington Post Staff Writers
Friday, August 7, 2009

The government's "Cash for Clunkers" program won a much-anticipated extension Thursday night as the Senate voted to give an additional $2 billion in funding to the popular initiative aimed at boosting stagnant auto sales.

The 60 to 37 vote follows House approval of a similar measure last week and appears to save the government plan from an unexpected early shutdown. The White House supports extending the program, and the new funds are predicted to last until Labor Day, Transportation Department officials have said.

"Cash for Clunkers" appeared to be in jeopardy last week just days after its official launch. Congress had appropriated $1 billion for the program, which offers vouchers worth up to $4,500 for drivers trading in their gas guzzlers for more fuel-efficient vehicles. But the program drew so much interest that it almost ran out of funds well before its expected expiration in November. Transportation officials warned lawmakers late last week that the plan faced suspension.

In a statement Thursday night, President Obama praised the swift passage of the Senate bill, calling the program "a proven success." Obama could sign the bill as early as Friday.

The Senate vote came after lawmakers considered and rejected several amendments to the legislation, including one from Sen. Tom Coburn (R-Okla.) that would have allowed trade-ins to be donated to charity. The current bill requires that the cars be junked.

"Today's vote is a victory for families and businesses all across the nation," Sen. Debbie Stabenow (D-Mich.) said after the vote.

Seven of 40 Republicans crossed party lines to support the measure, while four Democrats voted against it.

Auto dealers welcomed the prospect of additional money for the program, which has helped draw customers in droves.

"With the additional $2 billion, even more 'clunkers' will be taken off the road and replaced with more fuel-efficient vehicles," John McEleney, chairman of the National Automobile Dealers Association, said in a statement Thursday night. "Extending the 'clunkers' program benefits the environment and the economy. It's the best kind of stimulus."

Dealerships said they continued to see interest as the program ends its second week. AutoNation, one of the largest vehicle retailers in the country, said consumer traffic was up 35 percent over this time last year at its 225 dealerships in 15 states.

Since the program started, AutoNation has taken in 3,500 clunkers. To keep up with anticipated demand from the program, company executives ordered 45 percent more vehicles in the second quarter from major automakers, including Honda, Ford and Toyota.

"Cash for Clunkers is a huge success," said Marc Cannon, a senior vice president at AutoNation. "It is doing everything they said it would do: creating dealer traffic, clearing out inventory and getting more fuel-efficient cars on the road. This is what the American consumer and psyche needed."

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