Democrats Reach Compromise on Cash-for-Clunkers

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Tuesday, May 05, 2009 at 2:50 pm

House Democrats have just reached a compromise on a cash-for-clunkers bill that would provide financial incentives for people to trade in their old gas-guzzlers for more fuel efficient vehicles.

From the Energy and Commerce Committee’s press release:

Under the agreement, consumers may trade in their old, gas-guzzling vehicles and receive vouchers worth up to $4,500 to help pay for new, more fuel efficient cars and trucks. The program will be authorized for up to one year and provide for approximately one million new car or truck purchases. The agreement divides these new cars and trucks into four categories. Miles per gallon figures below refer to EPA “window sticker” values.

· Passenger Cars: The old vehicle must get less than 18 mpg. New passenger cars with mileage of at least 22 mpg are eligible for vouchers. If the mileage of the new car is at least 4 mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new car is at least 10 mpg higher than the old vehicle, the voucher will be worth $4,500.

· Light-Duty Trucks: The old vehicle must get less than 18 mpg. New light trucks or SUVs with mileage of at least 18 mpg are eligible for vouchers. If the mileage of the new truck or SUV is at least 2 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck or SUV is at least 5 mpg higher than the old truck, the voucher will be worth $4,500.

· Large Light-Duty Trucks: New large trucks (pick-up trucks and vans weighing between 6,000 and 8,500 pounds) with mileage of at least 15 mpg are eligible for vouchers. If the mileage of the new truck is at least 1 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck is at least 2 mpg higher than the old truck, the voucher will be worth $4,500.

· Work Trucks: Under the agreement, consumers can trade in a pre-2002 work truck (defined as a pick-up truck or cargo van weighing from 8,500-10,000 pounds) and receive a voucher worth $3,500 for a new work truck in the same or smaller weight class. There will be a finite number of these vouchers, based on this vehicle class’s market share. There are no EPA mileage measures for these trucks; however, because newer models are cleaner than older models, the age requirement ensures that the trade will improve environmental quality. Consumers can also “trade down,” receiving a $3,500 voucher for trading in an older work truck and purchasing a smaller light-duty truck weighing from 6,000 – 8,500 pounds.

Environmentalists will most likely be disappointed by this compromise, which draws on two competing bills. The weaker of the two original bills, sponsored by Rep. Betty Sutton (D-Ohio) and preferred by the auto industry, required that the new vehicle get at least 27 miles per gallon, while the bill favored by environmentalists mandated that the new vehicle be at least 25 percent more fuel efficient than the average vehicle in its class.

But according to standards imposed by the Department of Transportation in March, the average efficiency for cars and light trucks in 2011 will be 27.3 mpg. This compromise bill requires that a car get just 22 mpg in order for its new owner to receive a $3,500 voucher.

The clear winner in this arrangement is the auto industry, which will likely see its sales rise as people take advantage of the new incentives. The environment, it appears, will have to content itself with a distant second place.

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Comments

8 Comments

Robb
Comment posted May 5, 2009 @ 1:46 pm

So what if I want to trade in my 1984 full size pickup in for a motorcycle that gets 60+ mpg? No provisions for that? Looks like I'm paying for everyone else, again…


Bill Jensen
Comment posted May 5, 2009 @ 9:40 pm

Hmmm. This is some BS. I have a minivan that gets 17 MPG city and around 22 highway (I looked it up). It is a 1992 model and most certainly would be traded in on something that gets over 35 MPG.

So I'm screwed because this car doesn't get worse than 18MPG if you average the city/highway driving?

Meanwhile, someone could drive a 18MPG truck could turn it in on a 22MPG guzzler and get their $3500.

That doesn't seem right.


greg
Comment posted May 6, 2009 @ 4:57 am

Nothing this administration does seem right.You get $5000.00 for a clunker if you buy a $35000.00 dollar car.I bet Obama forces GM to make these Green Cars that no-one wants.If green cars end up being the only cars we can buy,they will be real expensive.You-ll be able to get a 1995 used car for $10,000.00 grand after people raise the prices(NEW CAR $50,000 or USED CAR $10,000.Every idea this guy comes up with SUCKS FOR US.He should of let us keep our green tech stimulas money,made incentives for green tech start ups,and let the Venture Capitalists take care of it.The Free Market will find us the best tech,for the least money(But I know how he loves to raise taxes,so that would never happen.


outoreach
Comment posted May 6, 2009 @ 6:37 am

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Photomaniacal » Blog Archive » Cash for clunkers goes off the rails | Ryan Avent
Pingback posted May 8, 2009 @ 2:39 pm

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e
Comment posted May 9, 2009 @ 5:17 pm

What a farce! I have a 1992 Lumina Z34 which gets about 13 mpg. The original sticker says it should get 17/26. I would love to trade it in on a new car with the $4500 incentive. Oh well, guess I will have to keep it and its pollution.


Vincent
Comment posted June 1, 2009 @ 11:01 am

I don't know why there setting a maximum MPG of 18MPG to participate. They should only require that the car be 10 years old or older and the new car get better MPG.

Why should it matter if you turn in a car that get 40MPG or 4MPG. Shouldn't the goal here be to get More MPG and get the economy going?


Vincent
Comment posted June 1, 2009 @ 6:01 pm

I don't know why there setting a maximum MPG of 18MPG to participate. They should only require that the car be 10 years old or older and the new car get better MPG.

Why should it matter if you turn in a car that get 40MPG or 4MPG. Shouldn't the goal here be to get More MPG and get the economy going?


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