The CFC bill came up for a vote as an amendment to a bill to fund the wars in Afghanistan and Iraq. The CFC bill could cost the federal government $1 billion, while the appropriations bill had a $106 billion price tag. In terms of political practicalities, the CFC bill was sheltered from much of the debate and analysis it might have otherwise faced as free-standing legislation. The bill accepted by the Senate was sponsored by Sen. Debbie Stabenow (D-Mich.), an ally of the now-not-so-Big Three Detroit manufacturers. Neither the Stabenow bill nor its main rival, an alternative from Sen. Dianne Feinstein (D-Calif.), was the subject of hearings in the Senate. The Feinstein bill would have allowed consumers to purchase used cars meeting certain standards with their vouchers.
The Stabenow bill was a leaner version of the bill the House passed, sponsored by Rep. Betty Sutton (D-Ohio). We will know very quickly if the Stabenow exclusion of used cars was a brilliant move: the vouchers are only available from July 1 to Nov. 1, 2009. If in that time the bill doesn't "work," Feinstein's bill is expected to be the basis for revamping the program.Under the plan, trade-ins must be in drivable condition, get no more than 18 mpg and be 1984 models or newer. The new car or truck must get better gas mileage — the bigger the difference, the bigger the voucher. For instance, a new car getting at least 10 more mpg than the old car would be eligible for a $4,500 voucher. If the new car offers a boost of 4 mpg or better, the voucher would be worth $3,500.
Predictions abound about the bill's failure. The Washington Post's editorial on it was headlined: "A Clunker of an Idea." The problem is that old cars worth less than $4,500 are apt to be owned by either middle- or lower-income folks who may not be in the market for a $20,000 to $40,000 new car. They are more likely to buy a used car; but, the voucher doesn't help them there.
The voucher won't help me either. I have a 1996 Ford Contour. It has been a great car. But I would like to replace it with a Ford Focus, Honda Civic or maybe a Hyundai Elantra. The Contour does not qualify for the "under 18 mpg category," however, even though the three candidate new cars would give me an extra 10 mpg or so. Will I buy a new car anyway? Well, I have a daughter in college, another in law school and a wedding to pay for next May. So I'll be buying a 2007 or 2008 low-mileage version (one still under the manufacturer's warranty) of one of the above, and pocket the $4,500 in savings off the new car price.
That is why I can't vouch for the new car voucher program.
Stephen Barlas has been a full-time freelancer Washington editor since 1981, reporting for trade, professional magazines and newspapers on regulatory agency, congressional and White House actions and issues. He also writes a column for Automotive Engineering, the monthly publication for the Society of Automotive Engineers.
