- The Washington Times - Monday, August 3, 2009

UPDATED:

Transportation Secretary Ray LaHood told consumers they have until Tuesday to trade in their old cars if they want to secure a popular $4,500 car discount and said the program would die unless Congress appropriates more money immediately.

Mr. LaHood said the unexpectedly popular “cash for clunkers” program is unlikely to accommodate any new applications after Tuesday because Congress has yet to extend funding for the program. Deals made through Tuesday will be honored, Mr. LaHood said Sunday on C-SPAN’s “The Newsmakers.”

“If we don’t get the $2 billion from the Senate, we would have to suspend the program next week,” Mr. LaHood said, though he added that the administration “will continue the program until we see what the Senate does, and I believe the Senate will pass this.”

The House on Friday passed legislation to give the program an additional $2 billion, and the Senate is expected to consider the issue Monday.

The Car Allowance Rebate System (CARS), which gives consumers up to $4,500 toward buying a car if they trade in a car with poor gas mileage, quickly became oversubscribed after it started last week.

Congress originally approved $1 billion for the program, which was quickly gobbled up by the sale of 250,000 vehicles, and the White House is now seeking a $2 billion extension. Despite the uncertainty about how many people will be able to benefit from the program, supporters have said the popularity is evidence of the program’s success.

“We’re going to need to continue to take steps to stimulate the economy, like the very successful Cash for Clunkers program, so that we’re keeping at doing everything we can to push this economy forward,” said White House National Economic Council Director Lawrence H. Summers on NBC’s “Meet the Press.”

Despite his warning, Mr. LaHood also defended the program’s effects on C-SPAN, saying that 62 percent of the vehicles taken off the road were trucks and “these people are buying cars that get much better gas mileage.”

Conservative lawmakers have been skeptical of the program, pointing out that large government handouts will almost always be popular and cautioning that the government’s underestimating the cost of the program provided an object lesson for other programs.

“The federal government getting in the used-car business - and we think, ‘Hey, this is working great,’ ” said Sen. Jim DeMint, South Carolina Republican, on “Fox News Sunday.” “But my children and grandchildren are going to have to pay for these cars, and we’re helping auto dealers while there are thousands of other small businesses that aren’t getting the help.”

“The federal government went bankrupt in one week in the used-car business, and now they want to run our health care system,” Mr. DeMint said.

Still, the program helped lift Ford Motor Co. to its first monthly sales increase in two years, Ford’s top sales analyst said Sunday.

“We were having a good month - and Ford’s been having some good months lately - but the [clunkers program] really put us over the top for sure,” George Pipas told the Associated Press without giving exact numbers. Ford’s official sales figures will be reported Monday.

Congress is expected to break for the rest of August at the end of this week, and House and Senate leaders already have a full plate with the ongoing health care debate pushing aside most other issues.

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