Update 1: Congress finished passing the CARS (Cash for Clunkers) bill today.
A overly cutely-named bill, the Consumer Assistance to Recycle and Save Act (CARS), is moving from the House to the Senate, where it is expected to pass. The bill was introduced to the House on June 8, passed on the 9th (note, some article refer to passage on the 5th, but the House calendar records it as passing on the 9th), sent to the Senate on the 11th, and entered the Senate calendar on the 11th. A little fast, no? A quick look at govtrack.us reveals the following information.
Sponsor: Rep. Betty Sutton [D-OH13]show cosponsors (59)
Text: Summary | Full Text
Cost: $15 per American over the 2009-2010 period. This is computed from a Congressional Budget Office report, merely by dividing the estimated cost of $4,000,000,000 by the U.S. population. The figure is extracted from the report automatically and may be incorrect. See the report for details.
Status: Introduced Jun 8, 2009
Referred to Committee View Committee Assignments
Reported by Committee Jun 11, 2009
Passed House Jun 9, 2009
Voted on in Senate ...
Signed by President ...
This bill has been passed in the House. The bill now goes on to be voted on in the Senate. Keep in mind that debate may be taking place on a companion bill in the Senate, rather than on this particular bill. [Last Updated: Jun 12, 2009 8:41AM]
Last Action: Jun 11, 2009: Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 74.
Jon Markman (MSN Money) wrote today:
'The program, which has been approved by the House but still needs to go to the Senate, would provide vouchers of $3,500 to $4,500 to Americans willing to trade in their old gas-guzzling vehicles as part of transactions for new vehicles that consume gasoline at slightly less fearsome rates. ... It's sort of like a store advertising a 15%-off sale, then billing the customer for the cost of the discount at the cash register. It sounds like a great deal until you realize the money doesn't come from outer space. It comes from taxes. It's like socialized medicine, but with mudflaps. The bill is called the Consumer Assistance to Recycle and Save Act -- CARS, get it? -- yet the main thing to be recycled would be taxpayers' money. It's a Pinto painted to look like a Ferrari. If [the return to GDP figures are] accurate, those would amount to gigantic swings off the negative-5% GDP growth of the first and second quarters and create a lot of political capital for Democratic lawmakers going into the 2010 re-election season. Perhaps we should rename the program "clunkers for Congress." ... As for the new vehicles, all 25 of the top-selling light vehicles of 2008 would meet the minimum. However, Barclays' analysis indicates Honda would see the greatest benefit because its fleet of fuel-efficient small cars and light trucks would fit the program best, with Toyota Motor (TM, news, msgs) a close second. The cost of the program is expected to hit $4 billion in the first year, and many lawmakers are already balking. Sen. Dianne Feinstein, D-Calif., who originally backed the concept, said the latest version "doesn't make much sense" because the fuel savings sought is small compared with the cost. After a junker got turned in, the dealer would be prohibited from selling or using it and would have to hand it over to the government -- so don't expect any premium over the voucher value. The feds would then drive it straight to a metal recycler, which would turn it into soda cans and maybe new fenders. This would create a lot of business for recyclers, though it might depress the price of metal due to a flood of supply.'
Catherine Holahan (also MSN Money) wrote in a separate article:
'For many people, that means a fairly cheap new car. But they're out there. (Here's MSN Autos' look at new rides under $10,000.) With a $4,500 voucher as a down payment and a four-year loan at 7.5%, the payments on a $10,000 car would be about $133. And don't forget, the sales tax on any new car, with a price of up to $49,500, bought between Feb. 17, 2009, and the end of the year is deductible on next year's tax return. Owners of clunkers without the credit or cash to buy would lose out. Not only would their taxes subsidize the bill, but the price of used cars would likely increase because the bill could take hundreds of thousands of them off the road. Parts to fix older cars would become more expensive, too, because the bill would require that engines and transmissions of trade-ins be destroyed and recycled.'
All I can see this bill accomplishing is the accrument of even more debt, with little to no benefit to the environment (the improvement in CAFE standards is token at best), no benefit to the poor, little to no benefit to the US auto industry, and a big handout to the Dems in Congress the Japanese auto industry. And it's obviously being rushed through to try and fly it under the radar. Edmunds.com reports:
'Though information from Congress suggests that the program may stimulate anywhere from 500,000 to 1 million new-car purchases, Edmunds.com believes that it will be a struggle to reach 500,000 vehicles, since the bill has become more restrictive in recent iterations . "A program intended to stimulate new car sales should target people in the market for a car, but the program does not," asserted Edmunds.com CEO Jeremy Anwyl. "The only people who qualify are those willing to take no more than $4,500 for their current car and immediately buy a new one — quite a narrow profile."'
Yet another piss-poor decision being made on your behalf by your friendly neighborhood Congress and President. Pretty soon, we'll all be told to turn in our brains for direct programming.