• Jul 31st 2009 at 4:18PM
  • 14
The U.S. House of Representatives voted 316 to 109 today in favor of H.R. 3435, a bill that will infuse the Car Allowance Rebate System, or Cash for Clunkers program, with an extra $2 billion. Word came late Thursday evening that the program, which offers consumers a rebate of $3,500 - $4,500 for trading in a "clunker," might be suspended after blowing through its initial funding of $1 billion in less than a week. Lawmakers managed to find the extra money in unused loans for renewable energy systems and pass it through the House today before the body breaks for a five-week-long vacation.

The Cash for Clunkers program will reportedly continue through the weekend and into next week when the funding bill arrives in the Senate where swift passage might not be guaranteed. The original bill that launched the program had many detractors in the Senate, some of who may see this as a second opportunity to either end the program or makes its fuel efficiency requirements even stricter. Even the amount of $2 billion could change – for better or worse – before the bill is approved by the Senate.

What should be obvious to everyone, however, is that if the original funding of $1 billion lasted less than a week, can we expect another $2 billion to extend the program more than another two weeks? The original program was slated to receive $4 billion in funding, but it's now clear that even full funding would've been exhausted far short of C4C's original end date in November. Meanwhile, despite reports from dealers that the program's reimbursement process is a mess, at least we know consumers are out there taking advantage of it.

[Source: CNN Money Autos | Photo by Justin Sullivan/Getty]


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  • 14 Comments
      • 8 Months Ago
      The only thing that's good about Cash for Clunkers is that it provides an almost perfect analog for the "Broken Window Fallacy": http://jim.com/econ/chap02p1.html

      This GOP/Dem bickering is intolerable. Wars and policies that promote destruction of usable property while adding unsustainable debt are both unbelievably stupid.
      • 8 Months Ago
      Trade in your 3 year old gas guzzling SUV before it's too late!

      ** please roll your SUV eight times and die on the way to the dealership ... please **
      • 8 Months Ago
      Message to the Government:

      Stay Out of the market!

      Government and efficiency dont mix, all their doing is extending the recession.
        • 8 Months Ago
        You mean the recession that now appears to be bottoming out?
        • 8 Months Ago
        you sound like Bush on that aircraft carrier with the banner saying "Mission Accomplished".....
      • 8 Months Ago
      What a deal! Hurry while the deal is still there. I am 4.500 dollars richer. This is a great chance to go green and help out the New G.M.
      • 8 Months Ago
      I'm glad to see congress pull through on this.

      It just goes to show that the right incentive will convince Americans to switch to more efficient vehicles.

      We need more of these programs, and they should be paid for with a gasoline tax increase.

      A gas tax increase would not only increase funding for these types of programs, it would help to pay the federal deficit which is primarily due to the $500 billion dollars of "unfunded" Military costs spent annually fighting wars for oil and protecting oil shipping lanes......
      • 8 Months Ago
      How about the people who cannot afford to buy a new car- will they now have to choose from a limited supply of used ones because of those who wish to take away as many affordable used ones as possible? Or is it that those in favor are beholden to the environmentalists who want this for eco-reasons? Perhaps it's better if someone now takes on the expense of a new car who may not be able to reach the end payment? This 'program' involves 'immobilizing' the engine of the trade-in with an additive and imposes other time conditions as well, reducing availability of spare parts and forcing salvage yards to now disassemble these cars or destroy thus driving up costs. I cannot imagine this helping the poor slobs being forced to accept this.
        • 8 Months Ago
        POLO SEZ:
        'Its so horrible that the US government is forcing scrap yards into compulsory labor to destroy these cars. I've heard they have quotas and if you don't do a certain number by the end of the day these black helicopters fly over your house really close at night so you can't get any sleep.'


        Your words, not mine.

        I don't see a reason to destroy something that affordable that someone needs, pretty simple actually, that's all. But I suppose that's just the problem of people who don't have the money to buy that new vehicle.
        • 8 Months Ago
        "How about the people who cannot afford to buy a new car- will they now have to choose from a limited supply of used ones because of those who wish to take away as many affordable used ones as possible?"

        Yes. Because this program is going to take a significant portion of the 257,000,000 cars off the road. Its that badass.


        -"Or is it that those in favor are beholden to the environmentalists who want this for eco-reasons?"

        Yep. Its all part of their sinster plot to replace God with GIAA. This is why we need prayer in schools.


        -"Perhaps it's better if someone now takes on the expense of a new car who may not be able to reach the end payment?"

        Of course, because its not like the lenders aren't still restricting financing to buyers with only the most perfect credit. Now you only need to have ~almost~ absolutely perfect credit.


        "This 'program' involves 'immobilizing' the engine of the trade-in with an additive and imposes other time conditions as well, reducing availability of spare parts and forcing salvage yards to now disassemble these cars or destroy thus driving up costs."

        Actually the entire car is junked. Its so horrible that the US government is forcing scrap yards into compulsory labor to destroy these cars. I've heard they have quotas and if you don't do a certain number by the end of the day these black helicopters fly over your house really close at night so you can't get any sleep.

        Please continue posting you are so insightful!
      • 8 Months Ago
      GREAT!

      The Fed charges the US gov't interest on fiat money that they created out of THIN AIR so Congress can run up more public debt so complete strangers can spend it on luxury items while running up personal debt to their bank while paying interest on credit that their bank created out of thin air via fractional reserve banking.

      Who's idea was this anyway? I get to share the cost of the public debt while other people pay interest on fantacy "money" that their bank loaned them for a new car that I will never drive or even see.

      The Winners... The Fed, Big Gov't Owned Auto and the banksters.

      The losers? The taxpayers.

      Now THAT's the Gov't-Corporate Partnership, Crony Capitalism and "progressive" redistribution that is Obamanomics!
        • 8 Months Ago
        Paul & Polo:

        I NEVER said what the Neocons said was right, but the Progressives are on a debt-acid trip.

        The war(s) are UNCONSTITUTIONAL and so is the Fed, Fiat Currency, Social(ist) Redistribution AND giving PUBLIC money to PRIVATE companies.

        Neither ONE wrong or 2 make a right (or an entitlement).
        • 8 Months Ago
        It was so much better in the good old days when 700B per year was funneled to defense contractors. Oh wait I guess that hasn't changed much.
        • 8 Months Ago
        THIS is the reaction from the delusional, hysterical, rethuglicans to any and every penny spent by the Dems....but where were they when Bush was blowing $3TRILLION on a pointless, destructive, wasteful war?? You have NO credibility, and to suddenly be against debt spending when Reagan was the all-time record-breaking champion of deficit spending...only to be followed by Bush who added $5TRILLION to the national debt (even with a $2Trillion surplus)...its laughable.


        Only World War II was costlier than Iraq war

        Zachary Coile, Chronicle Washington Bureau
        Tuesday, March 18, 2008
        04:00 PDT Washington --

        It was supposed to be a quick war and a cheap one. Five years later, 160,000 U.S. troops are still in Iraq. And the costs keep piling up - $12 billion every month - putting a strain on an already faltering economy.

        The United States has poured more than $500 billion into Iraq, mostly for military operations. But that figure is just a small piece of the much larger bill that taxpayers will pay in the future.

        Because the money for the war is being borrowed, interest payments could add another $615 billion. A heavily depleted military will have to be rebuilt at a cost of $280 billion. Disability benefits and health care for Iraq war veterans, many of them severely injured, could add another half-trillion dollars over their lifetime.

        Nobel laureate economist Joseph Stiglitz and Harvard University public finance Professor Laura Bilmes, both of whom served in the Clinton administration, have included those calculations in a new study of the war's long-term costs. Their estimate of the war's price tag: $3 trillion.

        But Stiglitz said the war has contributed to a weakening economy - partly by feeding the instability that has sent oil prices to record highs - and has saddled the country with debts that will make it harder to respond to a recession, fix Social Security or meet other future needs.

        "The best way to think about it is: What could we have done with $3 trillion?" he said. "What is the best way to spend the money, either for security or for our national needs in the long run? The stronger the American economy, the more prepared we are to meet any threat. If we weaken the American economy, we are less prepared."

        The White House has not disputed the analysis by Stiglitz and Bilmes but instead has attacked the idea that the escalating costs are a reason to withdraw.

        Costs of the war

        -- $435 million: Cost of Iraq war each day.

        -- $526 billion: Cost of combat operations to date.

        -- $1.2 trillion to $1.7 trillion: Estimated Afghanistan and Iraq combat costs through 2017.

        -- $590 billion: Future costs of disability benefits and health care for Iraq war veterans.

        -- $615 billion: Cost of interest on money borrowed to pay for the war.

        -- $280 billion: Cost of replacing equipment and restoring U.S. military to prewar strength.

        -- $16,500: Cost of the war to each U.S. family of four from 2003-2008.

        -- $36,900: Cost of the war to each family if the war continues for 10 years.

        -- $274 billion: Cost of increased oil prices related to the Iraq war, 2003-2008.
        What $435 million per day could do

        -- Enroll 58,000 children in Head Start.

        -- Put 8,900 police officers on the street.

        -- Provide health insurance to 329,200 low-income children.

        -- Hire 10,700 Border Patrol agents.

        -- Give Pell Grants to 163,700 college students.

        -- Provide foreclosure prevention counseling to 260,000 families.
        http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/03/17/MNBVVL9GK.DTL
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