Obama, Democrats agree on Cash for Clunkers bill

Jan. 1, 2020
The one-year plan crafted by members of the U.S. House of Representatives would offer vouchers worth up to $4,500 for owners to replace their less fuel efficient vehicles for models that get better gas mileage.

President Barack Obama and Democratic lawmakers reached an agreement on “Cash for Clunkers” — a legislative proposal designed to stimulate U.S. auto sales.

The one-year plan crafted by members of the U.S. House of Representatives would offer vouchers worth up to $4,500 for owners to replace their less fuel efficient vehicles for models that get better gas mileage.

The goal of the "cash for clunkers" legislation is to sell 1 million vehicles.

"By stimulating consumer demand for new vehicles, this proposal will directly benefit domestic autoworkers and automotive manufacturers, which have arguably been hardest hit by the current economic downturn," said Rep. John Dingell, a Michigan Democrat.

Previously, two versions of Cash for Clunkers were being floated in Congress — one introduced in the House of Representatives (H.R. 1550) by Rep. Betty Sutton (D-Ohio) and one by Dianne Feinstein (D-Calif.) (Bill #S. 247).

While full details of the compromised plan are not yet known, Dingell said consumers would get a $3,500 voucher if they trade in a car that gets less than 18 mpg for a new car with mileage of at least 22 mpg. Vouchers of $4,500 would be awarded if the new car gets at least 10 mpg more than the old.

It isn’t yet clear whether there is an age minimum for the cars being traded in, or whether foreign models qualify for the Cash for Clunkers assistance. These were two of the key differences in the bills proposed.

The Democrat-compromised Cash for Clunkers bill will likely be included as a provision of a larger Climate Change package being pushed by Democrats. It would still need to be officially passed through Congress and signed by the president being taking effect.

“Once in a while when you’re in Congress, you do something that really matters in people’s lives,” said President Obama, referring to Cash for Clunkers.

Rep. Henry Waxman (D-Calif.) head of the House Energy and Commerce Committee, said the Climate Change bill is on schedule to pass this year.

Cash for Clunkers has drawn opposition from most proponents of the automotive aftermarket, including SEMA and AAIA. The ASA has pushed for the Clunkers bill to include a repair option.

Read more analysis of the competing Clunkers bills.

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