House Quickly Sends $2 Billion More to ‘Cash for Clunkers’

The "cash for clunkers" rebate program, which promises new auto buyers up to $4,500 for fuel-efficiency upgrades as small as 2 miles per gallon, is back to life after burning through $1 billion in taxpayer cash.

Minutes ago, the House approved $2 billion more in auto rebates by transferring cash that was already headed for loan guarantees at the Department of Energy — averting the need to add the new spending to the deficit. The vote was 316-109.

The last-minute race to keep auto-industry benefits alive, which President Obama is strongly backing, now moves to the Senate. A bipartisan group there is already threatening to oppose new "clunkers" money unless its fuel-efficiency requirements are improved and used cars are approved for purchase rebates.

Right now buyers can get a $3,500 discount on new cars that get as little as 22 mpg. Small truck buyers are only required to improve 2 mpg to receive the same rebate, achieving a combined city and highway efficiency of 20 mpg.

An early version of the plan would have allowed the rebate value to be taken in transit coupons, but the DOT said earlier this week that no such option would be available.

Meanwhile, one environmental group that supported a stronger version of the "clunkers" plan that became law is now urging members to encourage the purchase of more efficient cars than the minimum.

"These are taxpayer dollars to help sell new cars," the Sierra Club wrote to its members. "It is up to consumers to put these dollars toward the purchase of highly efficient new vehicles not just a new guzzler."

Statistics on the early performance of the "clunkers" program, released by Rep. Ed Markey’s (D-MA) office, follow after the jump.

Late Update: 14 Democrats joined 95 Republicans in opposing the $2 billion. The 14 were Reps. Earl Blumenauer (OR), Stephanie Herseth Sandlin (SD), Brian Baird (WA), Lloyd Doggett (TX), Kurt Schrader (OR), Scott Murphy (NY), Jim Marshall (GA), Gabrielle Giffords (AZ), Allen Boyd (FL), Harry Mitchell (AZ), John Tierney (MA), Collin Peterson (MN), Jared Polis (CO), and Ann Kirkpatrick (AZ)

  • During the week that
    the program was launched, GM’s small car
    sales increased 54.8 percent over the preceding week.
  • The leading Ford
    vehicle being purchased under the program is the 28 mpg Ford Focus at nearly 30
    percent of all Ford sales.
  • Toyota
    reports that 78% of their "cash for clunkers" volume were the Corolla, Prius, Camry,
    RAV 4 and Tacoma,
    with a resulting average of 30 mpg.
  • Hyundai is reporting a
    59 percent increase in fuel economy compared to the old vehicle — which
    averaged 140,000 miles.

ALSO ON STREETSBLOG

Separating Myth From Fact on “Cash for Clunkers”

|
As debate rages on in the capital over whether to keep assisting the auto industry by giving out more "cash for clunkers" rebates, two assertions are becoming commonplace: the program is helping diminish U.S. oil consumption, and the program is not paid for with new money. Photo: AP The first argument was reiterated on Friday […]

As “Cash for Clunkers” Sputters, a Privately Funded Spinoff Picks Up

|
The U.S. DOT began signaling yesterday that it would bring the "cash for clunkers" program to an end amid growing unease from auto dealers about the government’s slow pace of reimbursement and General Motors’ decision to begin fronting "clunkers" repayments to its own salesmen. Photo: AmericaJR.com But with auto-industry forecasters predicting a cool 1 million […]
STREETSBLOG USA

GAO: Economic Recovery Benefits of ‘Cash for Clunkers’ Are ‘Uncertain’

|
"Cash for clunkers," the White House’s much-touted program encouraging trade-ins for more fuel-efficient autos, had an "uncertain" impact on economic recovery, according to a new audit from the independent Government Accountability Office (GAO) — largely because it remains unclear how many of the car sales it spurred would have occurred without taxpayer subsidies. Were "clunker" […]

Is “Cash for Clunkers” a Good Idea, Ever?

|
Photo: bondidwhat/Flickr The New York Times today endorsed a bill from Senator Chuck Schumer, and its companion in the House, co-sponsored by Long Island Democrat Steve Israel, which would offer up to $4,000 in vouchers to drivers who give up their gas guzzlers (averaging 18 miles-per-gallon or worse) in exchange for "a new or used […]