Thursday, July 30, 2009

Cash for Clunkers: That Was Fast!


Officials Say Government Set to Suspend 'Cash for Clunkers' Program

The Transportation Department called congressional offices late Thursday to alert them to the decision to halt the program.

WASHINGTON -- The government plans to suspend its popular "cash for clunkers" program amid concerns it could quickly use up the $1 billion in rebates for new car purchases, congressional officials said Thursday.

The Transportation Department called lawmakers' offices to alert them to the decision to suspend the program at midnight Thursday. The program offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle.

The congressional officials spoke on condition of anonymity because they were not authorized to speak publicly. Rae Tyson, a spokesman for the National Highway Traffic Safety Administration, which administers the program, declined comment.

Congress last month approved the Car Allowance Rebate System program, known as CARS, to boost auto sales and remove some inefficient cars and trucks from the roads. The program kicked off last Friday and was heavily publicized by car companies and auto dealers.

Through late Wednesday, 22,782 vehicles had been purchased through the program and nearly $96 million had been spent. But dealers raised concerns about large backlogs in the processing of the deals in the government system, prompting the suspension.

A survey of 2,000 dealers by the National Automobile Dealers Association found about 25,000 deals had not yet approved by NHTSA, or nearly 13 trades per store. It raised concerns that with about 23,000 dealers taking part in the program, auto dealers may already have surpassed the 250,000 vehicle sales funded by the $1 billion program.

"There's a significant backlog of 'cash for clunkers' deals that make us question how much funding is still available in the program," said Bailey Wood, a spokesman for the dealers association.

Even before the suspension, some in Congress were seeking more money for the auto sales stimulus. Rep. Candice Miller, R-Mich., wrote in a letter to House leaders on Wednesday requesting additional funding for the program.

"This is simply the most stimulative $1 billion the federal government has spent during the entire economic downturn," Miller said Thursday. "The federal government must come up with more money, immediately, to keep this program going."

Brendan Daly, a spokesman for House Speaker Nancy Pelosi, D-Calif., said they would work with "the congressional sponsors and the administration to quickly review the results of the initiative."

General Motors Co. spokesman Greg Martin said Thursday the automaker hopes "there's a will and way to keep the CARS program going a little bit longer."


Amusing Bunni said...

Hi B & G!
I saw your comment on my blog. I will send you another comment with the answer, and you can delete/ not approve it...then you'll have your answer...this is all so special black ops! The squirrels would approve.

That has to be the shortest silly program in history, I don't drive or have a car...but one last person they should use for "Cash 4 Clunkers" Obummer, and 5 cents. He's not even worth that! Ok, look for next comment and then delete it. Luv ya, Bunni

LL said...

Government Motors (GM) is paying $1 billion tax money to buy trashed cars. Why not simply reduce the price of the GM vehicles by $4,000 each? Leave the clunkers in the junk yards where they were before people had them towed in for the rebate...

blackandgoldfan said...

bunni: I wonder if everyone is suspicious of all the secrecy! Mwaaaaa!!!

LL: I would LOVE to own a Corvette, but you can bet your tushie that I will NEVER buy a GM or Chrysler product! I tell the hubby that they've gotten too much of my money already.

Your price reduction point is too intelligent for those in Washington!

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