Posted on 06/10/2009 2:39:21 AM PDT by Daffynition
WASHINGTON -(Dow Jones)- The U.S. House of Representatives approved legislation Tuesday aimed at stimulating auto sales by providing cash vouchers to consumers to trade in gas-guzzling cars for newer, more efficient models.
The 298-119 vote culminates months of wrangling among lawmakers over the details of a so-called "cash for clunkers" program, pushed mainly by Democrats and President Barack Obama. Most members voting "yes" were Democrats, while all but a few of the "no" votes came from Republicans.
The legislation aims to halt a steep slide in auto sales. Proponents pointed to a program in Germany credited with spurring a double-digit spike in car purchases there.
Rep. Sandy Levin, D-Mich., said the U.S. government's efforts to restructure the auto industry, which is costing tens of billions of dollars, "won't work if there isn't work on the demand side."
The legislation, which still must be passed by the Senate, faces hurdles, including questions about where to find the money for the one-year, $4 billion program. Some lawmakers have suggested the money could come from the economic- stimulus package passed earlier this year.
The House bill, authored by Rep. Betty Sutton, D-Ohio, would authorize the administration to provide cash vouchers of as much as $4,500 to consumers who trade in older vehicles and then lease or purchase a newer, more energy- efficient one. It would require the older vehicle to have a fuel economy of 18 miles per gallon or less and the newer vehicle to get at least 22 mpg. The voucher would be worth $3,500 if the newer vehicle achieved a 4 mpg increase in fuel economy. If the mileage of the new car was at least 10 mpg higher than the older vehicle, the voucher would be worth $4,500.
The older vehicles would be dismantled. [snip]
(Excerpt) Read more at money.cnn.com ...
The British government in conjunction with the Vauxhall Motor company has a similar program. If your car is over ten years old you can have it scrapped and receive 2,000 pounds towards a new Vauxhall.
My “old clunker,” a ‘97 Saturn, has 170k miles on it, runs great, and gets 30-35 mpg. I also save on car insurance. It’s nice to know that as a reward for my frugality, I’ll be paying for other people to buy new cars.
Who are they going to tax to pay for this creampuff?!
You and me baby...
same deal with my 94 Golf.
When dealing with gubermint, it rarely ever pays off to do the right thing, be responsible or ‘reuse and recycle’.
This is all about getting rid of all or most “used vehicles” in the USA; then when those are gone, when someone wants to buy a new vehicle (that is not made after Cafe 44, then they can’t): it’s all about ‘controll’.. this is an inovative way to waste tax money (and get rid of used vehicles) all at the same time (Here’s to hoping treasury runs out of money soon..before this hits hard)!
So, all of a sudden, every running, $500, sub-19 MPG piece of crap (e.g. my neighbor’s rusted-out, worn-out ‘84 Chevy pickup) is worth $3500-$4500, and us present and future taxpayers are stuck with yet another bill.
Whatta country.
Wake me when it’s finally over.
Ping.
California has had this program on a state basis for years...there’s a reason they’re the most bankrupt state in the union.
Under Mao’s Great Leap Forward, the Chinese people were required to surrender metal tools, to be melted down into new government-produced steel. The new government steel was so poor in quality that implements made from it cracked and broke. The people, who once had usable tools, were left with nothing but useless scrap metal. Nuff said.
They are to be dismantled.
No way they are getting my 1965 chevy PU!
“Cash for Clunkers” is coming. Taxpayers would be wise to wait and see the fine print on this bill because rebate and tax credit programs often aren’t as advertised. Consider this example: Back when Jimmy Carter was president, a homeowner’s energy tax credit was announced with much fanfare. Taxpayers could claim a tax credit for home improvements that saved energy. The way it was portrayed, it sounded as though the government was going to pay for your home improvements. Since my wife and I needed new storm windows anyway, we purchased them and then applied for the credit on our income taxes that year. After filling out the forms and doing all the calculations, factoring in our income, etc., we qualified for a tax credit of only $38.00. We mailed the IRS form, our 1040 and the receipts as instructed. It didn’t take long for the first letter from the IRS to arrive, demanding additional documentation and threatening us with interest, penalties and an audit.
History has a way of repeating itself. The rebate will be “up to $3,500" or "up to $4,500." The operative words here are “up to.” Anyone who has read the fine print in a cell phone ad or a cable TV ad knows what “up to” really means.
Made in North America
What is the true goal of Cash for Clunkers? There seems to be a tug-of-war going on between various special interest groups as to whether Cash for Clunkers is intended to help boost auto sales in general, boost domestic auto sales, or conserve gasoline and reduce pollution. The fuel-economy improvement thresholds - as currently proposed - are high enough that foreign brands stand to benefit more than domestic brands because their vehicles are generally smaller and more fuel-efficient. One version of the bill stipulates rebates would apply only to vehicles "assembled in America." If the goal is to help domestic auto makers, will Ford Motor Company products assembled in Mexico (Fusion, Milan, Lincoln MKZ) be excluded from the “Cash for Clunkers” program? Will Hondas built in Ohio qualify for the program? There are lots of unanswered questions and it all depends on whether the House or Senate version of the bill becomes law.
No skin in the game means increased risk
Under the proposed guidelines, the government cash goes directly to the dealer who sells the new vehicle, not the purchaser. The government’s logic is that this $3,500 to $4,500 rebate can be counted as cash from the buyer, which would help buyers get credit because they're financing less. On paper, someone who puts $3,500 or $4,500 down on a car loan sounds like a good credit risk, right? The only problem is, this isn’t really cash from the customer. Finance companies (the smart ones, anyway) are wary of deals where people don't put down any of their own money on a loan. In the finance business this is called having “no skin in the game.” With none of his/her own money invested, the customer can take delivery of a brand new vehicle, and if they can't make the payments, simply walk away without losing a thing. Then the finance company has a costly repossession to deal with -- assuming the vehicle can be located and hasn't been trashed or stripped. Unfortunately, too many dealers, desperate to make a sale, will pressure their finance sources to buy these deals even if the only money put down is the government-provided Cash for Clunkers money.
Now that the government essentially owns GM, Chrysler and General Motors Acceptance Corporation (GMAC), will there be pressure on auto manufacturers, captive finance companies and banks to approve car loans for people who can't afford them the same way banks were pressured to make mortgages available? Will auto finance companies be threatened with Justice Department investigations the same way banks were threatened? Will the CEOs of Chrysler Financial, Ford Credit and GMAC be summoned to Washington to testify before a Congressional committee and explain why they aren't approving more car loans under the Cash for Clunkers program?
SEMA weighs in
“Cash for Clunkers” will likely generate lots of headlines and make for great copy. Will it be another one of those programs that turn out to be not quite as good as advertised? Will there be unintended consequences? SEMA (Specialty Equipment Market Association), the nation’s most influential automotive specialty parts and accessories trade association, claims Cash for Clunkers will be costly in terms of jobs. “Scrappage programs as proposed will...hurt thousands of independent repair shops, auto restorers, customizers and their customers across the country,” said SEMA Vice President of Government Affairs Steve McDonald.
Before everyone’s heart goes atwitter over Cash for Clunkers, it would be wise to wait to see what is actually written into law.
I think during the Carter years, the old cars had to be scraped or, at least, junked.
They want power and control and they don’t care who they crush or what they destroy in the process as long as they have control over it all.
(see my tagline)
Why not call it the “War on the poor” bill?
If you haven’t noticed, there is a robust vehicle scrappage and recycling industry in America.
Morons. The energy needed to destroy tens of millions of old cars would far exceed the energy savings or 4/mpg. Morons. Democrats. But I repeat myself.
What some don’t realize is that the GM car dealerships that are having to close their doors, have to do so by this Friday or they lose any warranty coverage for the millions of dollars in product that still sits on their lots.
Regardless of whether the government has a right to put the gun to the head of these dealers, if they don’t sign their dealership away by Friday, the government is making a rule (or overriding law and being unconstitutional **shock**shock**) and making the dealerships lose even more money.
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