Senate Set to Approve Additional Funding for Cash for Clunkers

With the initial $1 billion allocated to the Car Allowance Rebate System, or "Cash for Clunkers", already fully utilized the U.S. Senate is widely expected to approve further funding of $2 billion to allow the program to be extended.

Despite concerns amongst some Republican Senators, Jim DeMint of South Carolina being the most prominent critic, as to the merits of continuing the program the additional funding, which was approved by the House before they departed for their summer recess last week, is expected to be approved by the Senate with support from both sides of the aisle. Indeed, according to the New York Times, Mr DeMint has indicated that he will not be attempting to block the vote on the extra funds, acknowledging that he did not have enough support to do so. CNN reports him as saying:

Whenever we spend money around here they got the votes

Republican Minority Leader Mitch McConnell of Kentucky has stated that he could not predict the outcome of the vote on the matter, but with the Senate summer recess due to start on Friday the program, which has proved popular with car dealers and manufacturers alike, would come to at least a temporary end if the additional funding did not receive approval by the end of the week. Any attempts by Republicans to amend the bill are unlikely to succeed as any amendments would have to return to the House for endorsement and with that chamber already away for the summer, and considered unlikely to return for a vote, it would be at least a month before the program could recommence. Senate majority leader Harry Reid, Democrat of Nevada, has spoken of his confidence that extending "Cash for Clunkers" will gain the necessary level of support whilst Transportation Secretary Ray LaHood had this to say on the matter:

There obviously is a real pent-up demand in America. People love to buy cars, and we’ve given them the incentive to do that. I think the last thing that any politician wants to do is cut off the opportunity for somebody who’s going to be able to get a rebate from the government to buy a new automobile

Some of those expressing initial reservations about the program were doing so because they doubted that the fuel economy ratings demanded of the new vehicles being purchased were sufficiently stringent. That fear has now been allayed because many of the vehicles being traded in have been pickups, S.U.V.s or vans and those being purchased have been sedans, producing an average fuel economy rating in excess of that required by the legislation. Nevertheless doubts still persist about the financial implications of the program, in which buyers can enjoy a rebate of up to $4,500 for trading-in their gas guzzler, even within the ranks of the Democrats. Senator Ben Nelson, Democrat of Nebraska, issued his own warning about the program when he said:

I don’t see how you ever shut it down. You just keep feeding the kitty and just keep putting more money into it unless you have a way to end it