REPORT: Cash For Clunkers to live through today, $2 billion more on its way [UPDATE]
by Jonny Lieberman on Jul 31st 2009 at 12:29PM 
Last night came the shaky, breathless news that Cash for Clunkers (C4C), the federal program to get older, more polluting cars off the roads by giving consumers between $3,500 and $4,500 rebates for their trade ins, had run out of money and was being shut down. Not so fast says the Detroit Free Press. C4C will live through the end of July. Which is... today.
Seems as if Michigan senator Carl Levin was assured by Transportation Secretary Ray LaHood (seen above at the program's kick off last Monday) that the suddenly befuddled, successful and possibly broke program will survive through Friday. After today? "Depends on whether the administration can find some money."
The Detroit News is reporting that money is on its way in the form of $2 billion siphoned from an energy loan guarantee program since Cash for Clunkers is a more urgent priority. The House of Representatives introduced H.R. 3435 today, which will like move through Congress at a rapid pace, though no one knows what will happen if more money isn't approved by midnight tonight.
UPDATE: H.R. 3435 just passed the House of Representatives by a vote of 316 to 109. This means the Cash for Clunkers bill is halfway to getting an influx of $2 billion, pending a vote by the Senate next week. Despite the delay, we're hearing reports that the program will not be suspended in the interim and that people can expect the rebates to be available while car shopping this weekend.
[Source: Detroit Free Press, The Detroit News | Photo by Win McNamee/Getty]
Reader Comments (Page 1 of 3)
Leclerc 12:34PM (7/31/2009)
Knee jerk
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James 12:57PM (7/31/2009)
The CARS Program itself is a...clunker.
Erik 12:36PM (7/31/2009)
DAMNIT DAMNIT DAMNIT
Just let it die! We don't have the money for this wasteful crap!!!
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BoxerFanatic 12:44PM (7/31/2009)
Exactly.
Where do they think this money is going to come from?
People can only pay so much in taxes. Government bonds are not selling at auction right now, and we are already nearly 2 TRILLION in the red in the short term, and that is not counting the forward liability this government has...
All this to destroy viable machinery as a hand-out to the new car dealers and companies...
Stop the insanity, PLEASE.
revvo 12:57PM (7/31/2009)
And you got ht eChinese who are thinking to use their Yuan currency as their reserve, not the US greenback.
I'm not surprised with all this careless printing and spending.
Leclerc 12:59PM (7/31/2009)
@Boxerfanatic. While everything you say is true, your statement regarding handouts to the new car dealers is questionable. The handouts are to the consumer. The dealers aren't getting any of this money, just pushing out a few more new cars. Those people who are buying new cars are the same people who would probably be purchasing pre-owned vehicles that in fact provide more profit for the dealerships than any new car they sell. Being in the business, I would much rather sell someone a pre-owned vehicle than a new one. Competition in the industry makes it extremely hard to garner any sort of viable profit selling anything new.
BoxerFanatic 2:36PM (7/31/2009)
Leclerc,
WRONG.
You cannot take your car in, and get cash. CAN NOT.
You have to take your car in and BUY A NEW CAR. You have to go into debt on a new car, and the government offsets some money from that...
If you don't need debt to buy a new car, chances are you aren't driving a clunker to begin with, and already have a newish car.
Chances are if you have a clunker, and 4500$ makes a difference... you'll need to finance the rest of the new car's price. If you had the money otherwise, again, you wouldn't be driving a "clunker" now.
The car buyer gets a new car, and slightly less debt, or the same amount of their maximum debt, and a newer car for it. A car buyer does not get 4500$ in discretionary cash.
All this is doing is artificially inflating new car demand, and sending viable cars to scrap metal supplies in China. THAT IS ALL.
And just like Zero percent interest that has been floating around at various times since 9/11/2001, eventually the deal-seekers will have their cars, and the demand will fall off again, and probably steeper, since the incentive moved all the demand to a certain point in time, rather than demand being spread out by individual circumstance.
BoxerFanatic 2:34PM (7/31/2009)
@leclerc
People don't get cash.
Dealers get cash to help lower prices.
the lower prices get people out of their old, but viable cars, and into a new car, and new car debt, minus gub'ment subsidy.
People who can afford to pay cash usually don't have clunkers.
People who have clunkers usually don't have newer cars for a reason, and very likely need financing, thus it is new debt.
This is artificially stimulating demand, and demand will crash when the deal seekers have their deals.
This is sending good cars to china as scrap metal, under a false environmental theme.
This isn't helping people... this is helping government assume more economic, and thus political power, while they spend taxpayers' hard earned money to do it.
And now much MORE of taxpayers' money.
British_Rover 4:27PM (7/31/2009)
The vast majority of Clunker deals we have done and other dealers I know have done were CASH DEALS from people with plenty of income and plenty of CASH in the. Thew few people that are financing have 750 Plus scores and are getting stellar rates. Stop fear mongering.
Scott 4:31PM (7/31/2009)
We easily spent this much every month of the "Iraq war" for years now. I hope you fiscal hawks are complaining just as much about that.
If you are, then good for you. I agree.
Erik 4:39PM (7/31/2009)
Scott:
You better believe I am.
Here we pay to kill working cars, there we pay to kill working servicemen.
Both are an unbelievably raw deal.
why not the LS2LS7? 12:37PM (7/31/2009)
Please don't.
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Mr.Oak 11:46AM (8/03/2009)
You appear to be a rational person. Please explain to me why this isn't the best money that we have spent thus far stimulating this beaten down economy.
The way I see it, most of the people trading in their clunkers, were already contemplating getting rid of their beaters. MOST have "rainy day" cash in hand. This was a deal too good for them to pass up.
The three billion outlay by the government, will generate 4 of 5 times that much consumer spending. Something this economy sorely needs.
Auto Manufacturers will benefit.
Employees of the Auto Manufacturers will benefit.
Suppliers of the Auto industry will benefit.
Dealers will benefit
Employees of the dealerships will benefit.
Insurance companies will benefit. (Beaters usually have just the minimum ins. allowed by law. New cars get full coverage).
Two years from now, hell no. Today? Most effective of ALL stimulus money spent.
Aloysius Vampa 12:38PM (7/31/2009)
MAKE IT STOP.
This is an incredibly stupid program, and the people behind it aren't too bright either.
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arturo 12:49PM (7/31/2009)
the wonders this clunker will do if the ford fiesta was around.
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PBR 10:37PM (7/31/2009)
...one nation, under God, with Liberty and Government handouts for all.
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ronEbear 12:52PM (7/31/2009)
So how about that health care reform? Communists have more freedom than you do.
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laser 12:58PM (7/31/2009)
Well, America - you want cake and circuses and you've elected a President and a Congress who will give it to you slice by slice, ticket by ticket, and then won't have any problem raping your wallets and purses to pay for it. Some of us warned you about this gang of thieves tens of months ago. Enjoy your free lunch - the Messiah will have no problem billing you for it. After all, it isn't about him - never - never - ever.
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BoxerFanatic 2:37PM (7/31/2009)
Some of us have been decrying the bread and circuses for a long while now, and didn't vote for it.
Some of us have been trying to AVOID all this.
But some people giving their freedom away, ends up giving ALL freedom away.
Lemon 1:01PM (7/31/2009)
Could we scrap some of our politicians and get a rebate so we can afford some better ones?
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