Cash for Clunkers

After “cash for clunkers” proved so popular that it threatened to run out of cash within its first week, the House pushed aside the other items on its agenda today to save it, passing a bill that allots another $2 billion to keep the program running.

The passage of the bill, by a vote of 316 to 109, helps stave off a temporary shutdown of the Consumer Assistance to Recycle and Save (CARS) program. The program allows a consumer to trade in a gas-guzzling vehicle for a $3,500 to $4,500 rebate to help buy a more efficient model. Seen as a boon to the struggling auto industry and as a benefit for the environment, the original bill was passed last month with $1 billion in funding. The program was meant to last until November 1 or the cash ran out.

The latter came first. Dealers reported that their showrooms were crammed with consumers eager for a trade-in. Thursday, less than four days after the program was up and running, it was nearly out of money. According to reports, the White House warned lawmakers that the program would have to be halted at midnight. It wasn’t, but uncertainty about the CARS’s future was rife until today.

The House bill has to pass the Senate next week, but that seems more than likely. And government officials say that the program will continue regardless through the weekend. “If you were planning on going to buy a car this weekend using this program, the program continues to run,” White House spokesman Robert Gibbs said this morning.

The program’s popularity seems to have taken many lawmakers aback. “It has succeeded well beyond our expectations and all expectations,” President Barack Obama said in remarks today. “It’s working so well that there are legitimate concerns that the funds in this program might soon be exhausted.” As of late Wednesday, 22,782 cars had been purchased through CARS. In their debate over whether to add another $2 billion to the fund, lawmakers spoke about dealerships in their districts being packed with customers for the first time in months. Consumers were clearly exhilarated, they said. So were struggling American auto companies. “This is one thing that we have done in this Congress that is absolutely working,” Republican Rep. John Campbell of California said in debate today.

But Campbell and others pointed out that the administration of CARS hasn’t been as successful. While the program “accomplished what we wanted it to accomplish,” said Rep. Pete Hoekstra of Michigan, not a single one of the dealers in his district has yet received approval from the Department of Transportation for the rebates they issued. That could leave them holding the bag for thousands of dollars.

There also have been concerns about the environmental impact of the bill. Right now, a consumer can get $3,500 for trading in an 18 mpg car for a 22 mpg one—not exactly revolutionary. And environmentalists point out that it takes cars off of the road even though they’re still functional, adding to the pollution that occurs each time a new car is manufactured.

Even so, the program gives the auto industry, and the economy, a needed boost. And even environmentalists agree that, at the very least, it sets the idea of fuel efficiency more firmly in consumers’ minds.