The US House of Representatives voted on Friday to pump another US$2 billion into a program that pays consumers to trade in gas-guzzling cars and trucks for more efficient vehicles.
The vastly popular program burned through US$1 billion in its first week after spurring the sale of about 200,000 vehicles.
It was a welcome reprieve for dealers and automakers reeling from a collapse in auto sales to levels not seen in decades.
PHOTO: AFP
“We probably sold 200 cars this week,” said Bill Golling, a Chrysler dealer in Bloomfield Township outside of Detroit. “I would have never expected that.”
Lawmakers voted 316-109 to prime the “cash-for-clunkers” program with monies taken from a giant economic stimulus package approved early this year.
The measure must now clear the US Senate, where its fate is far less clear, amid disputes on whether to require higher fuel efficiency and greater emissions reductions before extending the campaign.
In a statement thanking the House for passing the legislation, US President Barack Obama hailed the program as “a successful part of our economic recovery [that] will help lessen our dangerous dependence on foreign oil, while reducing greenhouse gas emissions and improving the quality of the air we breathe.”
“I urge the Senate to act with the American consumers in mind to pass this important legislation,” it said.
The program offers owners of old cars and trucks as much as US$4,500 toward a new, more efficient vehicle, a scheme meant to help stimulate the struggling auto industry while also helping the environment.
The plan is modeled on similar programs in France, Germany, Italy and Spain, which have had some success in sparking sales of new autos.
“I’m happy to report that it has succeeded well beyond our expectations and all expectations, and we’re already seeing a dramatic increase in showroom traffic at local car dealers,” Obama told reporters earlier at a briefing.
“It’s working so well that there are legitimate concerns that the funds in this program might soon be exhausted. So we’re now working with Congress ... to ensure that the program can continue for everyone out there who’s still looking to make a trade,” he said.
Democratic Representative Dave Obey, the House Appropriations Committee chairman, said the program had already resulted in 40,000 official requests and that at least 200,000 deals had been done but not yet officially submitted.
But some Republicans complained that the program was another instance of government meddling improperly in the economy.
“‘Cash for Clunkers’ is another example of the government picking winners and losers and enshrines us as a bailout nation,” said Republican Representative Jeb Hensarling of Texas.
“You cannot bail out, borrow and spend your way to prosperity. We now have the highest unemployment rate in a quarter of a century. The bailout mania approach to economic recovery is not working,” he said.
But the cash-strapped automakers urged lawmakers to extend the program.
“We need to encourage American consumers to continue trading in their clunkers for new, safer, cleaner vehicles,” said Michael Stanton, president and chief executive officer of the Association of International Automobile Manufacturers.
“This will not only help energize new car sales, it will provide a much needed shot in the arm to the US economy,” he said.
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