Senate Passes Cash For Clunkers Bill

This is really big news.  The US Senate has just passed Cash for Clunkers or Cash for Guzzlers legislation and it is now headed to the President’s desk for signature.  President Obama is expected to sign the legislation into law.

The bill passed the Senate on a vote of 91-5 after Senate Dems were able to keep it attached to a larger war funding bill. The new law should take affect 1 month after it is signed and is extended through November with a change for renewal then.

Cash For Clunkers Clears Huge Hurdle

On Thursday,  Cash for Clunkers legislation cleared a huge hurdle as it was attached to the back of a “must sign” Iraq and Afghanistan funding bill. While some still feel that the bill does not go far enough with requirements for higher fuel efficiency, it now appears that the bill is headed to the next step, approval by both chambers of Congress.

The bill as passed would require trade-ins to be manufactured after 1984 and have MPG of 18 or less, owned for at least 1 year and be in driveable condition. Vouchers up to $4,500 would be available to purchase vehicles under $45,000 if they provide a 10 MPG improvement on the trade-in.

Stay tuned as we continue to monitor the Cash for Clunkers bill.

Who’s For and Against Cash For Clunkers

As the CARS bill – also known as Cash for Clunkers – gains momentum, the fans and the critics are identifying themselves. Here’s a handy score card for who you’ll see on which side of the aisle…

But first, an update: Compromise is ruling the day with Democratic lawmakers coming to consensus on the key issues of whether cars need to be made in the USA to qualify for vouchers (lawmakers from automotive states are doing most of the conceding here, and it seems made in the USA won’t be a huge part of the compromise bill), and how fuel efficient the purchased automobile needs to be (The environmental lawmakers are ceding on this one, agreeing that the efficiency standards can be the Governments CAFÉ standards – lighter than those first proposed the green-oriented politicos.)

Who’s Opposed and Who’s For It?

Opposed:

  • The Automotive Affiliate Market. This group says that the bills’ requirements to scrap cars will result in parts that are usually refurbished being taken out of the market. They also say the bill won’t help the environment – people will turn in third cars that they aren’t driving anyway.

For:

  • President Obama. Estimates that the bill will drive $25 Billion in economic activity are key to the Administration’s promise to use stimulus dollars to relieve auto makers.
  • Car Dealers – even though there’s some concern about the impact that the bill will have on valuations of used cars. (Will every car over 8 plus years suddenly be assumed only to have values that are represented by the amount of the vouchers?

For – but only IF….

  • CarMax.  The large chain of used car dealerships argues that used car purchases need to be eligible for vouchers.

We’ll continue keeping score as the For’s and Against start lining up

EU Warns US on Cash For Clunkers

The EU has warned the US that it could be in violation of world trade rules if they do not allow Cash for Clunker trade-ins for non-US cars:

http://www.canada.com/warns+over+cash+clunker+program/1525858/story.html

The United States would violate world trade rules if proposed government payments to encourage consumers to trade in old gas-guzzling cars can be used to buy only new American-made vehicles, a European Union official said Wednesday.

“It is our hope that any car scrappage legislation ultimately enacted will remedy these concerns, and that the EU will be able to support this important initiative to promote fuel-efficiency, reduce pollution, and provide a needed boost to the automobile industry,” John Bruton, the EU’s ambassador to the United States, said in a statement.

Another Article About How Close a Deal is on Cash For Clunkers

http://www.detnews.com/article/20090424/POLITICS03/904240352/+Cash+for+Clunkers++deal+near

Washington — Congressional sponsors of two competing bills to offer cash vouchers to retire older vehicles and spur auto sales said Thursday they are nearing agreement on a compromise.

Rep. Steve Israel, D-N.Y., a sponsor of one of the bills, said officials were “90 percent” of the way to a compromise “Cash for Clunkers” program.

Iowa Senator Tom Harkin Supports Cash For Clunkers

Not much of a surprise, but Iowa Senator Tom Harkin is behind Cash for Clunkers and thinks lower  income families will especially benefit from it.

http://www.radioiowa.com/gestalt/go.cfm?objectid=D398FBAE-5056-B82A-37B38D5EA31EAFFA

“Low-income Americans mostly are the ones who are driving those cars,” Harkin says. “They can’t afford to buy a new car. They can’t afford to get the credit. Even if they could come up with a small down payment, they can’t get the credit to buy a new car. And then you provide the demand pull. You get a couple million new cars off the inventory list. This might stimulate G-M to start and run its plants more this summer.”