Jul 3, 2009

Some Hail 'Cash for Clunkers' Law

While some praise the fuel-saving and environmental benefits from the just-passed “Cash for Clunkers” legislation, others call the bill a colossal waste of the taxpayers’ money and a sop for the United Auto Workers union. Meanwhile, many environmentalists are dismayed that their program was hijacked to support the American car industry rather than replacing gas guzzlers with significantly more efficient vehicles.

One group that sees the Cash for Clunkers glass as being half-full is the team at smarttransportation.org. “We applaud Congress for approving the Cash for Clunkers program,” said Jack D. Hidary, chairman of the organization. “We will strive for even more efficiency gains on reauthorization of this program, but this is a start.”

The Consumer Assistance to Recycle and Save Act (CARS) H.R. 2751, also commonly known as Cash for Clunkers (CFC), was allocated $1 billion for this fiscal year. The program is estimated to result in the purchase of approximately 300,000 new cars and trucks in the United States before it comes to its expected conclusion in October. The CFC program requires that the vehicles turned in to be scrapped have a combined city and highway rating of no more than 18 miles per gallon and be in drivable condition. Consumers will receive a $3,500 subsidy to be used for the purchase of a new car if the new vehicle is at least 4 miles per gallon greater than the old vehicle, and a $4,500 subsidy if the increase in efficiency is at least 10 miles per gallon in comparison to the older car.

The initial bills contained provision that would have resulted in greater efficiency gains and options for converting the trade-in voucher to public transport rides, but those efforts died as the bill made its way through Congress.