Two Roads Diverged in the Cash-for-Clunkers Debate
A cash-for-clunkers scheme, which would provide financial incentives for drivers to trade in their old gas-guzzlers for new fuel-efficient cars, has gained momentum, with two competing bills in Congress. An editorial The New York Times today argued, with good reason, that one of these bills is vastly preferable to the other.
The measure supported by The Times, sponsored by Chuck Schumer (D-N.Y.) in the Senate and Steve Israel (D-N.Y.) in the House, would give drivers up to $4,000 for a car that gets 18 miles per gallon or less, if they trade it in for a vehicle that is 25 percent more fuel-efficient than the average in its class. The alternative, sponsored by Rep. Betty Sutton (D-Ohio), requires that the new vehicle get just 27 mpg. (The national average for 2011 vehicles, according to new regulations, will be 27.3 mpg.)
A cash-for-clunkers program would have two main goals: stimulating the flagging American auto industry and reducing greenhouse gas emissions. Sutton’s bill favors the former, and has therefore won much more support in Detroit, because it stipulates that only American vehicles can be bought under the scheme. The Schumer-Israel plan, on the other hand, emphasizes the latter, with higher fuel-economy standards and no buy-American clause.
Yet in the long run, the Schumer-Israel bill could actually do more to get Detroit back on its feet. By encouraging the production of fuel-efficient cars, the measure could help Detroit retool for a new auto economy that will favor smaller cars and hybrids. The Sutton bill does nothing to dissuade Detroit from continuing to produce the gas-guzzlers that helped get the American auto industry into its current fix.
In related news, The Michigan Messenger reports on a similar plan to get people to trade in their old household appliances.