Congress Mulls Cash for Clunkers

April 16, 2009
Special Feature

Now that the federal government has gotten itself into the automobile business, a number of ideas are being floated to help auto sales get off the launching pad, including one that would pay owners of gas-guzzlers a bounty if they scrap their old cars and buy a more fuel-efficient model.

Does Uncle Sam have a car deal for you? Now that the federal government has gotten itself into the automobile business, a number of ideas are being floated to help auto sales get off the launching pad, including one that would pay owners of gas-guzzlers a bounty if they scrap their old cars and buy a more fuel-efficient model. The idea, say proponents, is to boost sales for the auto makers while doing the environment some good at the same time.

There’s more than one version of this cash-for-clunkers scheme working its way through Congress, but all of them call for the old car to hit the scrap heap and would place some restrictions on the type of car you can buy to receive a bonus. Under one proposal, the amount of the bonus could range from $3,000 to $5,000 depending on the gas mileage of the car you buy. Another bill would put the bonuses on a sliding scale from $4,500 down to $2,000, depending on the age of the car being scrapped.

Critics are already taking potshots at the proposal. Some claim that a requirement that the fuel-efficient vehicle be made in the USA could get the country in trouble with its trading partners. Others are concerned that adding more than a million vehicles a year to the nation’s scrap yards and landfills will harm the environment more than getting the gas-guzzlers off the road will help. And despite claims that the bonuses are a better deal than consumers can get on a trade-in, naysayers point out that many fuel-thirsty vehicles on the road are worth far more than any anticipated government bounty.