CQ TODAY PRINT EDITION
– TRANSPORTATION & INFRASTRUCTURE
June 9, 2009 – 5:29 p.m.
House Passes Trade-In Rebate Bill in Attempt to Spur Car Sales
By Joseph J. Schatz, CQ Staff
The House passed legislation Tuesday afternoon that would authorize $4 billion for an auto trade-in program designed to boost consumer demand for cars and trucks.
The vote was 298-119, comfortably more than the two-thirds majority required to pass the bill under suspension of the rules, a fast-track procedure barring amendments.
The result of weeks of negotiations between House sponsor Betty Sutton , D-Ohio, and Sen. Debbie Stabenow , D-Mich., the final bill (
Appropriators are expected to include some funding for the trade-in program in the conference report on the Iraq and Afghanistan war supplemental (
Movement on the legislation, which President Obama has endorsed in concept, comes as lawmakers push the White House to avert the closure of thousands of auto dealerships as Chrysler LLC and General Motors Corp. struggle to emerge from bankruptcy.
Rep. Chris Van Hollen , D-Md., House Majority Leader Steny H. Hoyer , D-Md., and more than 100 other lawmakers wrote to Obama late last week threatening legislative action if the dealers are forced to close. Rep. Dan Maffei , D-N.Y., has introduced legislation (
The House-passed language differs somewhat from earlier versions of Sutton’s bill and includes changes contained in a measure that Stabenow offered June 3 as an amendment to a tobacco regulation bill (
The one-year trade-in program would start upon enactment of the legislation, rather than being retroactive to March 30. Vehicles made before model year 1984 would be ineligible for the rebate. The compromise also reduced a proposed fine for violating any provision of the legislation to $15,000, from $25,000.
Under the bill, consumers could receive a voucher worth as much as $4,500 for the purchase or lease of a new, fuel efficient vehicle upon trading in the less efficient passenger car, SUV or truck.
To receive a voucher of $3,500, the consumer must purchase a new car that gets at least four more miles per gallon. To receive a voucher for $4,500, the new car must have a rating at least 10 mpg higher.
For a light-duty truck or SUV, the old truck must have a rating of 18 mpg or less. To receive a voucher of $3,500, a consumer must purchase a new vehicle rated at least two miles per gallon higher. To receive a voucher for $4,500, the new vehicle must get at least five miles per gallon more.
Large vans, large pickups are work trucks also are eligible for the program, under differing requirements.
Crushing Requirement
The bill would require that trade-ins be “crushed or shredded,” but it would allow the person responsible for the crushing or shredding to sell off vehicle parts other than the engine block or the drive train.
While Dianne Feinstein , D-Calif., has introduced alternative legislation in the Senate favored by some environmental advocates, Sutton said that she and her allies “have ensured environmental integrity in this bill.”
House Minority Whip Eric Cantor , R-Va., criticized Sutton’s bill for not making used cars with good fuel economy eligible for the cash rebate, saying that families who can’t afford to buy a new car “deserve the same opportunity.”
“We’re defying the laws of economics and saying we can manufacture enough demand to keep the auto industry afloat,” Rep. Jeff Flake , R-Ariz., said. “We can’t simply manufacture demand any more than we can defy any of the other laws of economics.”
Sutton, whose Rust Belt district has been hard hit by the loss of manufacturing jobs, including those in the auto industry, introduced the first version of her bill (
A modified version was adopted as an amendment to the climate change bill (
Paul M. Krawzak contributed to this story.
Comments
The difference between the trade-in mpg and the purchase mpg doesn't seem significant enough to do much re energy conservation and thus to merit the rebate. $4500 rebate to change from a 15 mpg truck to a 20 mpg truck? As a subsidizer of this deal, I want a bigger impact for my buck. When I bought my own new car five years ago, I went from a 36 mpg VW to a 50 mpg Prius. Of course a lot of people aren't in a position to afford a Prius, and some improvement is better than none; but still, why such low expectations?
This is the government marketing to its people. There are worse things. Like war. They own what, 60% of GM? They want us who have been responsible and who have money and credit to go into dealerships and help prop up their/our company that is hurting. Let's pass this and see if it helps anyone.
The story doesn't mention how this is going to be paid for . Maybe the government should have gave out these vouchers BEFORE the car companies went bankrupt with our tax dollars.
Then let the people who think it's a good idea pay for the incentive. Let the people who keep voting in these large spending bills pay for what they put in. What we're really doing is paying for the trade in value, since the vehicles brought-in must be destroyed. We're not paying for people to buy new vehicles, we're paying for them to destroy the old ones...especially since older vehicles are excluded. Actually, the worse math is shredding a 18mpg truck for a 20mpg truck costing taxpayers $3500. And it's not like everyone is going to buy American... while the American companies are selling off their pieces overseas anyway... at taxpayer cost.
Sad day, Goverment Court would not take case, as they know it was illegal. The push by the Treasury for a FAKE bankruptcy is wrong. Please say something will stop this fraud. We will loose billions and then a REAL bankruptcy will wipe out the rest.
Ruth the article says that you need to upgrade 10 mpg to get the 4500. If you have a old truck or SUV (like I do with my Jeep Grand Cherokee) you would have to upgrade into the mid to upper 20's at least which almost means you have to get a hybrid SUV or a car for sure. I'm looking right now for a car with 34 combined but will have to wait for this to get through the Senate. I wish the article would mention when that is expected to happen.
What happens if the voucher is greater than my tax liability? Do I lose the benefit of the voucher? If so, this bill does not help retired persons who have low taxable income, but do want to buy a new car.
Why don't we just put all politicianson SOCIAL SECURITY then we won't have to worry about bailouts!
instead of spending 3 trillion dollars on bailouts none of which are showing much positive effects, why didnt the government just give every taxpayer 100,000 dollars. Houses would have been paid off,cars would be purchases and money infused into the stock market and the economy, We would have been much better of than giving money straight to the banks and car companies, The money to the tax payers would not have gone to the ceo's and board member bonuses but gone purchase goods and services.....we'd have been much better off
@ Ruth Anne Baumgartner I would just like to point out that going from 15 to 20 MPG is actually a better improvement that going from 36 to 50. If you drive 12,000 miles a year, you save 200 gallons of gas going from 15 to 20 MPG. You'd save 93.33 going from 36 to 50 MPG. Its a percentages thing. The more you can squeeze at the lower end the better. Is it worth to us a $4500 rebate? I have no idea.
This all sounds great for the new car dealers. What about us independent dealers that sell used cars. We are struggling now to get by, This will drop usoff the map. So much for small business making the US strong. Maybe we should start calling the US, USSR that seems to be the direction we are going.
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