'Cash for Clunkers' Incentives Plan Approved by House

The U.S. House approved legislation that would give consumers as much as $4,500 to buy new, fuel- efficient vehicles under a “cash-for-clunkers” proposal aimed at boosting auto sales.

The program, passed 298-119, would replace 1 million older vehicles with newer cars and trucks to reduce gasoline use and air pollution, according to the measure’s sponsors. Car owners would get a $3,500 government voucher for the purchase of a new vehicle getting 4 more miles per gallon than their old car. They would get $4,500 if the new vehicle improved mileage by 10 miles per gallon.

“We can free ourselves from the false argument that either you are for the environment or you are for jobs,” said the measure’s chief sponsor, Ohio Democrat Betty Sutton, on the House floor today.

Ford Motor Co., the only major U.S. carmaker that hasn’t filed for bankruptcy protection, hailed the House’s action.

“This timely, targeted and temporary program will put money directly in the hands of consumers and work to reduce fuel consumption and greenhouse-gas emissions,” Pete Lawson, the Dearborn, Michigan-based company’s vice president for government affairs, said in a statement.

“Ford will continue our work with lawmakers to ensure this critical bill” is quickly cleared for President Barack Obama’s signature, Lawson said.

‘Hard-Earned Money’

Representative Tom Price of Georgia, chairman of the Republican Study Committee, criticized the plan in a statement that said, “Taxpayers should not see their hard-earned money used to buy their neighbor a new car.”

The measure requires Senate approval as well as an allocation of funds to cover the estimated $4 billion cost. Lawmakers are discussing whether to include money for the program in a spending measure designed to fund the Afghanistan and Iraq wars.

The program would provide funds for car owners whose vehicles get 18 or fewer miles per gallon. The new car would have to get at least 22 miles per gallon. Similar benefits would be available for truck owners who trade in their vehicles for ones getting at least 1 mile per gallon more. The money could be used to buy U.S. or foreign vehicles.

In May, U.S. car industry sales declined 34 percent from a year earlier, according to Autodata Corp. of Woodcliff Lake, New Jersey. Detroit-based General Motors Corp. and Auburn Hills, Michigan-based Chrysler LLC are in bankruptcy.


'Cash for Clunkers' Details:

HOUSE

The House was expected to vote on a bill Tuesday sponsored by Rep. Betty Sutton, D-Ohio. Its provisions:

_Passenger car owners could receive a voucher worth $3,500 if they traded in a passenger car getting 18 miles per gallon or less for a new car getting at least 22 mpg.

_Sport utility vehicle, pickup truck or minivan owners that get 18 mpg or less could receive a voucher for $3,500 if their new SUV, truck or minivan is at least 2 mpg higher than their old vehicle.

_Passenger car owners could get a voucher for $4,500 if they traded in a passenger car getting 18 miles per gallon or less for a new car that is 10 mpg higher than the old car.

_SUV, pickup truck or minivan owners that get 18 mpg or less could receive a voucher for $4,500 if the mileage of the new truck or SUV is at least 5 mpg higher than the older vehicle.

_Large trucks (pickup trucks and vans weighing between 6,000 and 8,500 pounds) with mileage of at least 15 mpg would be eligible for vouchers of $3,500 to $4,500.

_Consumers can receive vouchers for the purchase and leasing of new vehicles.

_Older trade-in vehicles must be in drivable condition, be manufactured in model year 1984 or later and be continuously insured to the same owner for at least one year immediately prior to trade-in.

SENATE

A group of senators led by Sen. Dianne Feinstein, D-Calif., have proposed an alternative to the House version. Its provisions:

_The trade-in passenger car must get 17 mpg or less and the new passenger car must get at least 24 mpg to be eligible for vouchers.

_Passenger car owners could receive a voucher worth $2,500 if they traded in a passenger car getting at least 7 mpg more than the old car. The voucher would grow to $3,500 if they traded in a passenger car getting at least 10 mpg more than the old car. And it would grow to $4,500 if they traded in a passenger car getting at least 13 mpg more than the old car.

_The purchase of a used passenger car with a mileage of at least 24 mpg would qualify for a voucher of $1,000.

_The trade-in sport utility vehicle, pickup truck or minivan must get 17 mpg or less and the new vehicle must get at least 20 mpg to be eligible for a voucher.

_SUV, pickup truck or minivan owners could get a voucher for $2,500 if they traded in their vehicle for a new SUV, pickup truck or minivan getting at least 3 mpg more than the old vehicle. The voucher would increase to $3,500 if they traded in their vehicle for a new SUV, pickup truck or minivan getting at least 6 mpg more than the old vehicle.

_SUV, pickup truck or minivan owners could a voucher for $4,500 if they traded in their vehicle for a new SUV, pickup truck or minivan getting at least 9 mpg more than their old vehicle.

_The purchase of a used SUV, pickup truck or minivan with a mileage of at least 20 mpg would qualify for a voucher of $1,000.

_Large trucks (pickup trucks and vans weighing between 6,000 and 8,500 pounds) with a mileage of at least 17 mpg would be eligible for vouchers ranging from $2,500 to $4,500.

Sens. Debbie Stabenow, D-Mich., and Sam Brownback, R-Kan., have sponsored legislation in the Senate that has similar requirements as Sutton's bill in the House.