On May 21, the House Energy and Commerce Committee formally adopted a White House / Congress compromise that includes a “Cash for Clunkers” amendment within the American Clean Energy and Security (ACES) Act. The amendment is designed to cut greenhouse-gas emissions while stimulating auto sales.
If ACES becomes law, the program will be authorized for up to one year and provide for approximately one million new car or truck purchases. ’Cash for Clunkers’ would offer vouchers worth $3,500-$4,500 to people who trade in old gas-guzzlers for new cars and trucks. Car buyers would receive a $3,500 cash voucher for trading in any vehicle that earns less than 19 mpg and purchasing one that gets at least 22 mpg. If the new car gets more than 10 mpg better than the old one, the cash voucher would rise to $4,500.
Light truck and SUV consumers would get a similar incentive, but the low-end for new vehicles is set at 18 mpg. If the mileage of the new truck or SUV is at least 2 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck or SUV is at least 5 mpg higher than the old truck, the voucher will be worth $4,500.
U.S. Representative Bruce Braley (D-Iowa) said of the amendment, which passed 50-4-1, “The ‘Cash for Clunkers’ concept will help boost our economy, save families money, and decrease our dependence on foreign oil. By including this compromise in the new energy bill, we can accomplish many goals at once: consumers will get a break to purchase more fuel-efficient vehicles; we will all benefit from a reduction of greenhouse gases; and we will save American jobs by jumpstarting the auto industry.”
Braley, a member of the the House Energy and Commerce Committee since earlier this year, welcomes comments about the ACES Act.
The program could cost taxpayers $4 billion. Similar legislation in Germany has allegedly boosted new-car sales by 40 percent. A similar bill was withdrawn from the U.S. Senate stimulus package in February.
What are your thoughts?