‘Cash for Clunkers’ Car-Sale Plan Approved by House (Update1) Share | Email | Print | A A A By Jonathan D. Salant
June 9 (Bloomberg) -- The U.S. House approved legislation that would give consumers as much as $4,500 to buy new, fuel- efficient vehicles under a “cash-for-clunkers” proposal aimed at boosting auto sales.
The program, passed 298-119, would replace 1 million older vehicles with newer cars and trucks to reduce gasoline use and air pollution, according to the measure’s sponsors. Car owners would get a $3,500 government voucher for the purchase of a new vehicle getting 4 more miles per gallon than their old car. They would get $4,500 if the new vehicle improved mileage by 10 miles per gallon.
“We can free ourselves from the false argument that either you are for the environment or you are for jobs,” said the measure’s chief sponsor, Ohio Democrat Betty Sutton, on the House floor today.
Ford Motor Co., the only major U.S. carmaker that hasn’t filed for bankruptcy protection, hailed the House’s action.
“This timely, targeted and temporary program will put money directly in the hands of consumers and work to reduce fuel consumption and greenhouse-gas emissions,” Pete Lawson, the Dearborn, Michigan-based company’s vice president for government affairs, said in a statement.
“Ford will continue our work with lawmakers to ensure this critical bill” is quickly cleared for President Barack Obama’s signature, Lawson said.
‘Hard-Earned Money’
Representative Tom Price of Georgia, chairman of the Republican Study Committee, criticized the plan in a statement that said, “Taxpayers should not see their hard-earned money used to buy their neighbor a new car.”
The measure requires Senate approval as well as an allocation of funds to cover the estimated $4 billion cost. Lawmakers are discussing whether to include money for the program in a spending measure designed to fund the Afghanistan and Iraq wars.
The program would provide funds for car owners whose vehicles get 18 or fewer miles per gallon. The new car would have to get at least 22 miles per gallon. Similar benefits would be available for truck owners who trade in their vehicles for ones getting at least 1 mile per gallon more. The money could be used to buy U.S. or foreign vehicles.
In May, U.S. car industry sales declined 34 percent from a year earlier, according to Autodata Corp. of Woodcliff Lake, New Jersey. Detroit-based General Motors Corp. and Auburn Hills, Michigan-based Chrysler LLC are in bankruptcy.
To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net. Last Updated: June 9, 2009 17:42 EDT
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