- The Washington Times - Wednesday, June 10, 2009

ASSOCIATED PRESS

The House on Tuesday approved a “cash for clunkers” bill that aims to boost new auto sales by allowing consumers to turn in their gas-guzzling cars and trucks for vouchers worth up to $4,500 toward more fuel-efficient vehicles.

President Obama has encouraged Congress to approve consumer incentives for new car purchases as part of the government’s work to restructure General Motors Corp. and Chrysler LLC. The House approved the bill by a vote of 298-119.

Supporters pushed for the measure to stimulate car sales and increase the fleet of fuel-efficient vehicles on the nation’s highways. The auto industry has sought the incentives after months of poor auto sales. In May, overall sales were 34 percent lower than a year ago.

“Stimulating sales is the only way to get the auto industry back on its feet,” said Rep. Donald Manzullo, Illinois Republican.

The vehicle scrappage bill has been under negotiation for months as lawmakers try to find a solution that boosts car sales while providing some environmental benefits. Proponents have pointed to similar programs in Europe that have enhanced auto sales.

Opponents said the bill failed to include incentives for used vehicles and represented an artificial incentive for the industry.

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. Lawmakers would attempt to find the additional $4 billion for the yearlong vehicle program later this year.

Under the House bill, dealers participating in the program would receive an electronic government voucher for the trade-in to apply to the purchase or lease of a qualifying vehicle. The old vehicle would be disposed of rather than resold.

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 mpg. 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. The miles per gallon figures are listed on the window stickers.

Owners of sport utility vehicles, pickup trucks 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.

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