Senate Will Approve 'Cash-for-Clunkers' Extension, Lawmakers Say

August 5, 2009 - 4:33 AM
The Senate cleared the way Tuesday for a vote giving eager car buyers until Labor Day to cash in on rebates up to $4,500 for trading in their gas-guzzlers for new, higher-mileage models.
Washington (AP) - Roadblocks disappearing, the Senate cleared the way Tuesday for a vote giving eager car buyers until Labor Day to cash in on rebates up to $4,500 for trading in their gas-guzzlers for new, higher-mileage models.
 
Senate Majority Leader Harry Reid declared he had the votes to pass a $2 billion "cash for clunkers" measure already approved by the House. It would replenish the all-but-exhausted $1 billion program and provide rebates for up to a half-million more Americans in the next month.
 
Despite reservations, Reid's GOP counterpart, Mitch McConnell of Kentucky, predicted his party would not block a vote and "the matter will be completed."
 
"I think the last thing any politician wants to do is cut off the opportunity for somebody who wants to get a rebate to buy a new automobile," said Transportation Secretary Ray LaHood, a former Republican congressman from Illinois.
 
Senate passage would send the legislation to the White House for Obama's signature and guarantee there would be no interruption in the program that has sent buyers streaming into formerly deserted auto showrooms.
 
Republicans were still seeking a chance to amend the House version that would extend the program into September, but Democrats were confident the bill wouldn't be changed.
 
"We'll pass 'cash for clunkers' before we leave here," Reid said after Democrats lunched at the White House with Obama, who has vigorously pushed the extension as a much-needed boost for the economy. Asked whether he had the votes to pass the measure, Reid replied, "Yes."
 
What Democrats don't have is much time. Obama said that demand would drain the program of its initial $1 billion by Friday. That's also the day senators are to embark on their month-long August recess.
 
Republicans said they were still negotiating with Reid for the chance to offer changes to the legislation. But McConnell said, "I would anticipate that the matter will be completed some time before the end of the week."
 
Under the program, buyers of new cars and trucks can get rebates of $3,500 to $4,500 by trading in older models that are then scrapped.
 
The popular program has allowed about a quarter-million Americans to buy new cars at time when the economy is still in recession and needs a boost in consumer spending.
 
On Monday, the White House had warned that the program could come to an abrupt halt Friday if the Senate didn't pass the House bill. The legislation would transfer $2 billion from an economic stimulus account that had been set aside to subsidize renewable energy. The new money would carry the program through September, said White House Press Secretary Robert Gibbs.
 
Through early Tuesday, the clunkers program had recorded 157,000 transactions worth $664 million. Eighty-three percent of the vehicles traded in were trucks or SUVs, while 60 percent of the vehicles purchased were passengers cars, for an average increase in fuel efficiency of 61 percent, Gibbs said.
 
Opposition to extending the program has been dissipating. One vocal GOP critic, South Carolina Sen. Jim DeMint, said Tuesday he would not try to block the legislation. And three lawmakers who wanted the program limited to the purchase of even more fuel-efficient vehicles said Monday they would back the plan.
 
Yet Democrats as well as Republicans have raised concerns. Senators in both parties have said it costs too much. Some Democrats have argued that the program should require tougher emissions standards for the new vehicles. Republicans have said it puts the government in the bad position of picking winners and losers.
 
"People want to know what's going to be next. Cash for shoes? Cash for groceries?" said Sen. Richard Shelby, R-Ala.
 
Car companies have credited the clunkers program with driving up sales in late July. Ford said its sales rose 2.4 percent in July from the same month last year, its first year-over-year increase since November 2007, while Chrysler Group LLC posted a smaller year-over-year sales drop compared with recent months, helped by the special deals. Other automakers are doing better, too.
 
Most consumers are buying smaller, more fuel efficient vehicles under the program, according to a list of the top-10 selling cars released by the National Highway Traffic Safety Administration.
 
That includes Honda Civics, Toyota Corollas and Dodge Calibers. The Toyota Prius hybrid, which gets 46 miles per gallon according to EPA estimates, is the fourth-best-selling car. There is one SUV on the list, the Ford Escape, which also comes in a hybrid model that can get up to 32 miles per gallon.
 
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Associated Press writers Stephen Manning and Joan Lowy in Washington and Tom Krisher in Detroit contributed to this report.