Parking clunkers

WASHINGTON — With auto sales in the doldrums, the House considered a plan Tuesday to provide vouchers of up to $4,500 for consumers who turn in their gas-guzzling cars and trucks for more fuel-efficient vehicles.

The House proposal, set for a floor vote Tuesday, was aimed at boosting car sales during a bleak period for the auto industry and increasing the nation’s fleet of cars that get more miles to the gallon.

"Stimulating sales is the only way to get the auto industry back on its feet,” said Rep. Donald Manzullo, R-Ill.

General Motors Corp. and Chrysler LLC have received billions of dollars in government aid and the entire auto industry has watched car sales plummet during the past year. In May, overall sales were 34 percent lower than a year ago.


Funding plans
The vehicle scrappage bill has been under negotiations for months as lawmakers try to find a solution that boosts car sales while providing some environmental benefits.
Opponents said the bill failed to include incentives for used vehicles and represented an artificial incentive for the industry.

"It’s defying the laws of economics and saying we can manufacture enough of a demand to keep the auto industry afloat,” said Rep. Jeff Flake, R-Ariz.

Separately, House and Senate appropriators were discussing providing $1 billion to a supplemental war funding bill for the "cash for clunkers” program, which aims to generate about 1 million new auto sales. Since the yearlong vehicle program is expected to cost $4 billion, lawmakers would attempt to find the additional money later this year.

Under the House bill, car owners could get a voucher worth $3,500 if they traded in a vehicle getting 18 miles per gallon or less for one getting at least 22 miles per gallon. The value of the voucher would grow to $4,500 if the mileage of the new car is 10 mpg higher than the old vehicle.

Owners of sport utility vehicles, pickups or minivans that get 18 mpg or less could receive a voucher for $3,500 if their new truck or SUV is at least 2 mpg higher than their old vehicle. The voucher would increase to $4,500 if the mileage of the new truck or SUV is at least 5 mpg higher than the older vehicle.

Rep. Betty Sutton, D-Ohio, the bill’s chief sponsor, said the bill showed that "the multiple goals of helping consumers purchase more fuel-efficient vehicles, improving our environment and boosting auto sales can be achieved.”

Sen. Debbie Stabenow, D-Mich., has backed a similar version in the Senate, which has the support of automakers and their unions.

The bill would direct dealers to ensure that the older vehicles are crushed or shredded to get the clunkers off the road. It was intended to help replace older vehicles and would not make financial sense for consumers owning an older car with a trade-in value greater than $3,500 or $4,500.




by the associated press