- The Washington Times - Wednesday, August 5, 2009

President Obama’s push for a $2 billion expansion of the “cash for clunkers” program has won support from a previously skeptical pair of senators who wanted stronger pollution-fighting mandates, but the measure still faces a close Senate vote.

Democrat Sen. Dianne Feinstein of California and Republican Sen. Susan Collins of Maine have announced that they will support the program, which offers up to $4,500 rebates for consumers who trade in old gas guzzlers for new fuel-efficient cars, despite earlier demands for higher gas-mileage requirements.

Their change of heart greases the wheels for Senate passage of the $2 billion measure, but the White House and auto lobby are still scrambling to shore up the vote to assure victory. Democratic leaders will have to struggle just to overcome the often plodding pace of the Senate to get the bill to the floor before the chamber adjourns Friday for the August recess.

Despite a full-throttle offensive by the auto lobby, a majority of Americans oppose expanding the program, according to a Rasmussen Reports poll released Tuesday.

The telephone survey showed 54 percent of Americans oppose any further funding for cash for clunkers, with 33 percent supporting it and 13 percent undecided. Those figures are virtually identical to a poll in June after Congress approved the original $1 billion plan.

The original funding, which ran out after about a week, passed the Senate by one vote.

Most Senate Republicans oppose the plan, arguing that it is another example of runaway spending by Mr. Obama and further government intrusion into the free market.

Mrs. Collins said Tuesday she still had reservations about funding the program by shifting $2 billion from a renewable-energy loan program. She said a better funding formula could be found to boost consumer demand for fuel-efficient cars without subsidizing automakers.

She said the bill was too important to let it expire this week and that changes could be made to the funding scheme later, such as using the Troubled Asset Relief Program funds designated for bailouts.

“I don’t want the program to be suspended,” Miss Collins told reporters at the Capitol. “Unfortunately, the House having left town, we really have very limited options.”

Mrs. Feinstein, after meeting with administration officials Monday, said the program was working better than expected because consumers voluntarily opted for vehicles with higher fuel-efficiency than required.

“To date, it has proved to be both a stimulus and a fuel-efficiency program,” she said.

The administration calculated that the new cars purchased under the program got an average 25.4 miles per gallon, a 61 percent increase over the traded-in models.

The White House had warned that the popular program could run out of money by Friday if the Senate fails to act.

Auto dealers and the associations that back them have been fighting hard to persuade the Senate to extend the program, which has helped push annualized sales of light vehicles in the United States over the 11 million mark in July.

Auto sales had been languishing at an annual pace of less than 10 million vehicles throughout the first half of the year, but “cash for clunkers” is credited with luring hundreds of thousands of customers to dealer showrooms.

But beyond a quick, temporary jolt to consumer demand, analysts do not expect a long-lasting impact on the industry or the economy from the program.

Ryan Sweet of Moody’s Economy.com said the program was essentially “front-loading” auto sales into July and August of vehicles that otherwise would be purchased over the next several quarters. He estimated that about 250,000 buyers had benefited from the rebates.

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