President Barack Obama and the leadership of the U.S. House of Representatives Committee on Energy and Commerce have proposed a new Cash for Clunkers plan that they believe will stimulate domestic car sales. The proposal would replace older, less-fuel-efficient vehicles with new, more-fuel-efficient vehicles – thus spurring new car sales in the United States.
Princeton University’s Dr. Alan Blinder, in a New York Times article published in 2008, referred to this policy option as “Cash for Clunkers” – government payments to remove older, less-fuel-efficient or high-polluting vehicles from America's highways.
The proposal states that consumers may receive vouchers worth up to $4,500 to help pay for new, more-fuel-efficient cars – in hopes of selling 1 million cars in one year. The proposal outlines that:
• 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.
The Administration and Energy and Commerce Committee proposal excludes a vehicle repair option. In a letter to members of Congress, the Automotive Service Association (ASA) pointed out: “ASA members are small businesses all across America, actively engaged in their communities, employing a tremendous number of technicians and office personnel. A fleet modernization program without a repair option could be devastating to independent repairers. Arbitrarily removing older vehicles from America’s highways would take vehicles out of independent repair bays, costing jobs and potentially closing small businesses. A repair option tied to higher-emitting vehicles is the most cost-efficient, consumer-friendly approach to a fleet modernization program. This option would also allow low-income vehicle owners who don’t have the resources for a new vehicle to now have a dependable, lower-emission vehicle.”
ASA argues that any Cash for Clunkers Program should:
• include a vehicle repair option for consumers;
• be administered by the states;
• tie vehicle participation to emissions and improving air quality; and
• provide sufficient repair cost allowances to address emissions repairs.
ASA asks that repairers contact their senators and representatives and ask that they support a vehicle repair option for any Cash for Clunkers initiative that is considered by Congress. To send a letter to Congress in support of a repair option, go to www.TakingTheHill.com.
