rssCash to Trade Clunkers for Clunkers?
Wednesday, June 17, 2009 at 6:00 am
- 29 Comments
On its surface, it sounds like a wonderful environmental benefit: A program providing thousands of dollars to drivers who scrap their gas guzzlers in favor of more fuel-efficient models. Yet critics on and off Capitol Hill say the so-called “cash-for-clunkers” initiative has morphed into a billion-dollar industry handout, allowing automakers to push large, inefficient and otherwise unsellable vehicles off of bursting lots, in the process undermining separate efforts to reduce the nation’s carbon emissions.
Several different cash-for-clunkers’ proposals have surfaced in Congress this year, but the version currently making its way toward the president’s desk — championed by Rep. Betty Sutton (D-Ohio) and Sen. Debbie Stabenow (D-Mich.) — offers cash vouchers up to $4,500 for drivers who swap their gas-slurping cars, trucks and SUVs for vehicles boasting better fuel economies. Supporters of the proposal consider it a multi-pronged benefit, offering consumers big rebates in a down economy, stimulating car sales to help struggling automakers and dealers, and yanking clunkers off the roads for the benefit of the environment.
Illustration by: Matt Mahurin
Yet critics are quick to point out that the bill offers discounts on many new vehicles with fuel economies below the average even within their own vehicle class. As a result, some truck and SUV drivers will be eligible for thousands of taxpayer dollars to purchase the latest version of the same large vehicle they’ve just scrapped — even in cases when the new model boasts just one- or two- miles-per-gallon better economy than the old. Many environmentalists, and some lawmakers, say the proposal is just another case of Congress protecting the auto industry — which has already received billions of dollars in federal help — at the expense of the environment.
In a Wall Street Journal op-ed published last week, Sens. Dianne Feinstein (D-Calif.) and Susan Collins (R-Maine) called the Sutton and Stabenow bills “another big bailout” for the industry. “These bills are expertly designed to provide Detroit one last windfall in selling off gas guzzlers currently sitting on dealer lots because they’re not a smart buy,” the lawmakers wrote.
The debate is emblematic of the conflicting responsibilities facing Democratic leaders trying simultaneously to pull the country out of a deep recession, tackle the specter of global warming and manage both in ways that can pass through a Congress prone to protecting regional industries. On one hand, Democrats are pushing new laws encouraging reductions in greenhouse emissions; on the other hand, they’ve already spent billions to help Detroit’s automakers, and don’t want to see the investment go to waste.
Indeed, Sutton’s $4 billion proposal won strong bipartisan backing in the House last week, passing the lower chamber as a stand-alone bill by a count of 298 to 119, with 59 Republicans joining most Democrats in favor of the proposal. Though the Senate has no plans to take up the full $4 billion proposal in the near future, lawmakers on Friday attached a smaller, $1 billion version of the bill to must-pass spending legislation funding the wars in Iraq and Afghanistan. The House passed the spending package Tuesday night, with the Senate expected to take it up as early as this week.
Under the Sutton proposal, drivers of cars and small trucks getting no more than 18 mpg can trade them in for cash toward the purchase of new vehicles. If the new vehicle is a car boasting a mileage improvement of at least 4 mpg, the trade in will be worth $3,500. If the car is at least 10 mpg more efficient, the cash reward jumps to $4,500. For small trucks, SUVs and minivans, the new vehicle must get at least 18 mpg, with the $3,500 and $4,500 voucher going to vehicles at least 2 mpg and 5 mpg more efficient, respectively. For even larger pickups and SUVs, the minimum economy for the new vehicle is 15 mpg, with an improvement of 1 mpg above the trade-in resulting in the $3,500 reward and an improvement of 2 mpg yielding $4,500. The old vehicles would be destroyed to get them off the roads forever.
“This legislation will ensure that we have a strong manufacturing base and get more fuel-efficient vehicles on the road, which is essential to our economy, to our national security, and a clean, green future,” House Speaker Nancy Pelosi said in a statement.
Yet under those guidelines, owners of 1996 4WD Ford F150 pickups (fuel efficiency of 14 mpg) could trade them in on 2009 4WD Ford F150 pickups (15 mpg), and receive $3,500 for the effort. The driver of a 1994 2WD Jeep Grand Cherokee (16 mpg) would be eligible for $3,500 with a trade-in on the 2009 version of the same vehicle (18 mpg). And consumers could trade their 1995 4WD Dodge Ram pickups (13 mpg) for $4,500 toward a brand new 4WD Hummer HT3 (16 mpg). The list goes on.
“Basically, you can trade in a clunker and get a voucher for a new clunker,” said Daniel Becker, director of the Safe Climate Campaign, which advocates for better fuel efficiency. “The auto guys are out there shaking their tin cup, and there are lawmakers who are happy to fill it up.”
Neither the offices of Stabenow nor Sutton returned requests for comment.
Environmentalists prefer a competing proposal, sponsored by Feinstein, Collins and Sen. Charles Schumer (D-N.Y.), that promotes a similar cash-incentive structure but increases the mileage improvement thresholds consumers must reach to receive vouchers. The bill also ups the fuel-efficiency floors in each vehicle category to coincide with the 2008 average economy in each vehicle class. As a result, the lawmakers estimate their bill would reduce greenhouse gas emissions and gasoline consumption per vehicle by 32 percent each year relative to the House bill.
“Our legislation is not aimed at bailing out the auto industry, although it would spur vehicle sales,” Collins said in a statement. “It is environmental legislation that has the added benefit of helping the auto industry.”
Yet many supporters of Sutton’s bill — both on and off Capitol Hill — contend that Collins has it backwards. Cash for Clunkers, they say, should prioritize economic stimulus, with the added benefit of helping the environment.
“This is not the House climate change bill,” said Stephen J. Collins, president of the Automotive Trade Policy Council, which represents Ford, Chrysler and General Motors. “That’s not its sole purpose.”
President Obama — who delighted environmentalists earlier this year by announcing the adoption of stricter national emissions standards — endorsed the Cash for Clunkers concept in March. During a speech on the future of the automotive industry, the president noted that similar programs adopted by a number of European countries have succeeded “in boosting auto sales.”
The emphasis on the economy above the environment in the cash-for-clunkers debate has alienated some consumer groups. Lena Pons, an auto policy analyst at Public Citizen, said the group was involved in early discussions surrounding the program, but dropped out of the negotiations when it become clear the industry defenders were poised to have their way.
“It looked like the priority was about moving vehicles off the dealer lots,” Pons said. “There were a lot of parties who were interested only in reducing the backlog of inventory.”
29 Comments
Pingback posted June 17, 2009 @ 11:07 am
[...] The Washington Independent’s Mike Lillis asks if Congress’ cash-for-clunkers plan has turned into “cash to trade clunkers for clunkers.” [...]
Comment posted June 17, 2009 @ 10:25 am
A coupon to buy a new car is far better than handing money to a company that's going bankrupt and never to be recovered, At least the people who paid the taxes in the first place get something. I'm waiting for this to pass & I'll be trading in my 17mpg explorer for something in the high 20's or better
Comment posted June 17, 2009 @ 12:33 pm
This is an important opportunity for political leaders to take initiative on protecting our environment.
For a flip side on environmental issues, as well as for new sustainable ways of living and doing business, please check out my latest cartoons at
Many thanks again and very best to the author and others who share comments,
Mary
Comment posted June 17, 2009 @ 12:35 pm
if the old car/truck must be destroyed, would the trade-in value be zero?
Comment posted June 17, 2009 @ 1:39 pm
Yep, I think this is a much better way to go than CAFE standards or bailing out car companies. We offer incentives for people to trade-up into more fuel efficient vehicles. Let's face it, a family that needs the space of a minivan or SUV to get around isn't going to trade up to a Prius, but they will trade up to a smaller and more fuel-efficient vehicle that can still get them around. Same with a contractor who owns a pickup. So in order to have the best impact on the environment, the mpg increase has to stay realistic with the current technology, which Feinstein's bill didn't. Better to have 100,000 people improve their fuel economy by 4mpg than have 20,000 people improve by 10mpg.
But the Big Egos and Republican “Party of NO” folks in the Senate are probably going to screw this up.
Comment posted June 17, 2009 @ 5:25 pm
A coupon to buy a new car is far better than handing money to a company that's going bankrupt and never to be recovered, At least the people who paid the taxes in the first place get something. I'm waiting for this to pass & I'll be trading in my 17mpg explorer for something in the high 20's or better
Comment posted June 17, 2009 @ 7:33 pm
This is an important opportunity for political leaders to take initiative on protecting our environment.
For a flip side on environmental issues, as well as for new sustainable ways of living and doing business, please check out my latest cartoons at
Many thanks again and very best to the author and others who share comments,
Mary
Comment posted June 17, 2009 @ 7:35 pm
if the old car/truck must be destroyed, would the trade-in value be zero?
Comment posted June 17, 2009 @ 8:39 pm
Yep, I think this is a much better way to go than CAFE standards or bailing out car companies. We offer incentives for people to trade-up into more fuel efficient vehicles. Let's face it, a family that needs the space of a minivan or SUV to get around isn't going to trade up to a Prius, but they will trade up to a smaller and more fuel-efficient vehicle that can still get them around. Same with a contractor who owns a pickup. So in order to have the best impact on the environment, the mpg increase has to stay realistic with the current technology, which Feinstein's bill didn't. Better to have 100,000 people improve their fuel economy by 4mpg than have 20,000 people improve by 10mpg.
But the Big Egos and Republican “Party of NO” folks in the Senate are probably going to screw this up.
Comment posted June 19, 2009 @ 2:30 am
How new is new? is it possible to trade my clunker for a 2008, 2007 or even a 2003?
Comment posted June 19, 2009 @ 3:20 pm
Very interesting and informative article!
Thank you for posting!
Comment posted June 22, 2009 @ 6:06 pm
An exactly how am I going to afford payments on a new car???
Comment posted July 22, 2009 @ 9:13 pm
I think the mileage standards are unfair on the clunkers being traded inbecause a vehicle thats 10 years old does not get close to the mileage rating that was on the sticker when it was bought for instance i have a 1999 toyota tacoma 2wd 4 cylinder automatic sticker on it when it was new was an average 20mpg it gets me 17 mpg now and has 290000 miles its a true clunker and im still driving it but it dont qualify for the program i think its a waste of my tax dollars tyvm
Pingback posted July 27, 2009 @ 1:13 pm
[...] the environment and the adrift domestic auto industry, the "cash for clunkers" concept quickly became nothing but the latter after Congress watered it down to apply to cars that get as little as 22 [...]
Pingback posted July 27, 2009 @ 1:30 pm
[...] the environment and the adrift domestic auto industry, the "cash for clunkers" concept quickly became nothing but the latter after Congress watered it down to apply to cars that get as little as 22 [...]
Pingback posted July 27, 2009 @ 1:50 pm
[...] the environment and the adrift domestic auto industry, the "cash for clunkers" concept quickly became nothing but the latter after Congress watered it down to apply to cars that get as little as 22 [...]
Pingback posted July 31, 2009 @ 9:45 am
[...] morning may not be whether the program gets more money but if environmentally-minded lawmakers heed the warnings of conservation groups and insist on greater fuel-efficiency improvements in order to qualify car [...]
Pingback posted July 31, 2009 @ 10:26 am
[...] morning may not be whether the program gets more money but if environmentally-minded lawmakers heed the warnings of conservation groups and insist on greater fuel-efficiency improvements in order to qualify car [...]
Pingback posted July 31, 2009 @ 12:27 pm
[...] morning may not be whether the program gets more money but if environmentally-minded lawmakers heed the warnings of conservation groups and insist on greater fuel-efficiency improvements in order to qualify car [...]
Pingback posted July 31, 2009 @ 2:02 pm
[...] now buyers can get a $3,500 discount on new cars that get as little as 22 mpg. Small truck buyers are only required to [...]
Pingback posted July 31, 2009 @ 2:19 pm
[...] now buyers can get a $3,500 discount on new cars that get as little as 22 mpg. Small truck buyers are only required to [...]
Pingback posted July 31, 2009 @ 3:11 pm
[...] now buyers can get a $3,500 discount on new cars that get as little as 22 mpg. Small truck buyers are only required to [...]
Pingback posted July 31, 2009 @ 5:43 pm
[...] now buyers can get a $3,500 discount on new cars that get as little as 22 mpg. Small truck buyers are only required to [...]
Comment posted July 31, 2009 @ 10:03 pm
I think the Cash for Clunkers Program is totally short sighted fro three reasons. (1)The cars that are traded will be re-sold – this will not help the environment – the cars need to be scrapped. (2) The individuals who are purchasing the new cars are doing so prematurely – to get the incentive – a short-term improvement to the economy. (3) The cars that are being traded in will carry a lower market value – too many will be available – a short-term proble for the economy.
Pingback posted August 1, 2009 @ 3:42 am
[...] vehicles with better fuel efficiences. Yet the efficiency thresholds were set so low that consumers can trade in their old clunker for a brand new clunker — a boon for the automakers and dealers, but hardly a way to reduce the greenhouse gasses [...]
Pingback posted August 1, 2009 @ 12:13 pm
[...] also turns out that there’s some parts of the CARS bill that are just plain ridiculous. The Washington Independet reports that: …critics are quick to point out that the bill offers discounts on many new [...]
Comment posted August 5, 2010 @ 7:48 am
is it possible to trade my clunker for a 2008, 2007 or even a 2003?
Comment posted December 10, 2010 @ 8:41 am
The Epi Leather, shiny palladium hardware, rolled leather handles with ring attachments, and Louis Vuitton Canvas engraved padlock on the side of the bag make this handbag truly standout. Instantly, I fell in love with the balenciaga bags Speedy in black! It was gorgeous, sophisticated and I thought it would lovely in my collection. I absolutely loved the Speedy Cube, but due to the ultra high price I turned to the Epi collection for a more affordable take on a black louis vuitton belts handbag. At the moment, I have four different louis vuitton clutches in my collection going on a 5th in two weeks and I thought it was quite senseless to even think to getting lousi vuitton Speedy 30. So I change to search for a black Jimmy Choo clutches I came across the Louis Vuitton Leather Lockit and it was love at first sight! I have been eager to own a Louis Vuitton store Outlet in black for some time now. If the Catier bags doesnt interest you in black, it also is available in Cassis, Ivoire, and Red. My personal favorite is the black, and I just may add the Louis Vuitton discounts Epi Leather Lockit to my current wish collection. By the way, if you think the price is high, you can visit our online store to choose some Louis Vuitton multicolor for you. I change to search for MiuMiu tote I came across the Louis Vuitton Speedy handbag. Epi Leather Lockit and it was love at first sight! The Louis Vuitton Epi MiuMiu online have always been a favorite to me, and when I saw that the lockit came in Epi Leather also I was took. For some odd reason,cheap lv handbags sale, I have never taken notice of this particular lockit handbag before and I must say it is stunning.The features of this handbag are absolutely beautiful. Written by Louis Vuitton Trunk On Sale.
RSS feed for comments on this post.
Sorry, the comment form is closed at this time.
