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Auto Trade-In Program No Easy Sell

By Shailagh Murray
Congress isn't sold on the "Cash for Clunkers" idea just yet.

House and Senate Democrats have encountered early obstacles in meeting President Obama's call for a new incentive to encourage people to trade in aging automobiles for new, more fuel-efficient models. Lawmakers aren't sure they can fund the potentially blockbuster program, for one, and also are running into potential international trade concerns.

The incentive idea has been circulating for weeks but got a major boost this morning when Obama endorsed it as a way to reduce pollution while bolstering ailing U.S. automakers General Motors and Chrysler. House and Senate leadership aides said White House officials want to redirect funds from the $787 billion economic stimulus bill to pay for a trade-in program that would take effect immediately.

"Such fleet modernization programs, which provide a generous credit to consumers who turn in old, less fuel efficient cars and purchase cleaner cars have been successful in boosting auto sales in a number of European countries," Obama said in his White House speech.

Backers include Democratic representatives from Ohio and Michigan, who pressed for the president's support during a Sunday night conference call with administration officials. Participants in the call said several lawmakers became distraught when they learned Obama would force both carmakers to meet strict restructuring standards before receiving further government aid.

"The Midwestern lawmakers were really upset and pleaded with the administration to address the demand side," said one Democratic official who was briefed about the call.

One proposal on the table, sponsored by Rep. Betty Sutton (D-Ohio) and supported by House Speaker Nancy Pelosi, would provide vouchers valued at $3,000 to $5,000 for individuals to trade in high-polluting cars that are at least eight years old, for new cars with a fuel efficiency rating of at least 27 miles per gallon the highway, or 24 miles per gallon for new trucks. U.S. auto sales have declined by over 40 percent in the past year, slowing production and creating a vast backlog of new inventory.

A similar program in Germany saw new car sales increase by 21 percent in February, Sutton noted.

But funding the vouchers is proving a major challenge. Democratic aides said Congress would have to reprogram funds from the stimulus bill, ensuring a battle with proponents of whatever measures are targeted for cuts.

Also, Sutton's bill -- which appears to be the White House favorite, at least for the moment -- would apply only to new cars that were assembled in the U.S. That caveat may violate World Trade Agreement rules, said Democratic aides, who noted that Germany made a similar discovery while creating its incentive program. And yet, if the Sutton legislation is expanded to include all vehicles, many lawmakers would likely balk at subsidizing foreign automakers.

Finally, car industry officials and United Auto Workers representatives have raised concerns with lawmakers that Congress will set fuel efficiency levels too high, exempting larger cars and sports utility vehicles that are creating much of the supply glut. But setting the levels too low would minimize the incentive's environmental benefits.

"Obviously, there will be renewed interest in this proposal with the president's endorsement today, but it is too early to assess the viability of legislation in this area," said a senior Senate Democratic leadership aide.

Posted at 6:27 PM ET on Mar 30, 2009  | Category:  Economy
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I love the idea of being able to trade for a more fuel efficient car, and given an incentive to do so. But alas, most will choose the flash and dash, bigger is better, and we will never get down the road to independence of foreign oil.

Also, I would like to choose which car company I would purchase from. We have four HONDA INSIGHTS (2 dr.) I would love to trade two in on the new (4 dr.) INSIGHT II coming out in April. A Win Win situation.

Posted by: nos4nus | April 1, 2009 12:21 AM

Personally, I love the idea. I drive a '91 chevrolet caprice and would love a large trade-in to a new car, but my question would be since I had a bankruptcy, would I be able to get finance.

Most people who drive older cars do so for a reason.

Posted by: Kaybeth34 | March 31, 2009 12:25 PM

A HIT JOB BY UNCLE SAM, INCORPORATED?


The trade-in subsidy is a great idea -- that's where the money should have gone in the first place. BUT...


As someone who's been waiting for Obama to fulfill his promise of hope, and restoration of civil liberties in post- Bush-Cheney America, I'm concerned that his administration's handling of the GM president's ouster plays into the "socialist thug" narrative cultivated by his political enemies.


Surely this matter could have been handled more deftly. If Team Obama wanted Rick Wagoner to go away, it could have kept the blood off of Obama's hands. Instead, Wagoner came off looking like he was on the receiving end of a hit job by Uncle Sam Incorporated, with Boss Barack as the triggerman.


Whoever advised Obama on this particular M.O. needs to take a long ride in a crowded back seat.


***


WOLF BLITZER'S SIN OF OMISSION

Wolf interviewed Seymour Hersh on "The Situation Room" today about his claim that former VP Dick Cheney ran an "executive assassination ring" (Sy says he said "wing") out of the White House.


Hersh stuck by the story, reaffirming the substance of his claim -- but he pedaled back on his language, saying perhaps he shouldn't have used the phrase "executive assassination wing." (Sure sounded like "ring" on the tape...)


He also indicated to Blitzer that he was talking about foreign operations.


BUT -- Wolf NEVER asked Hersh about the truly explosive part of his remarks during that recent seminar in Minneapolis...


...that the CIA and the military have been involved in what Hersh described in Minneapolis as "DOMESTIC" operations against American citizens -- and he had added that such operations are still going on.


The audio is available at:


http://www.minnpost.com/ericblackblog/2009/03/11/7310/investigative_reporter_seymour_hersh_describes_executive_assassination_ring


Why did neither Blitzer nor Hersh elaborate on the domestic angle? Was this omission purposeful?


Will Hersh elaborate in another forum, perhaps in the New Yorker magazine? I am curious, because his reference to domestic ops could have something to do with what is reported in this article:


http://www.nowpublic.com/world/gestapo-usa-govt-funded-vigilante-network-terrorizes-america


OR (if link is corrupted):


http://NowPublic.com/scrivener

Posted by: scrivener50 | March 31, 2009 12:01 AM

parkerfl1: He's trying to save the auto industry, isn't that what you want him to do? or should he do nothing and get accused of letting them fail?

Posted by: JRM2 | March 30, 2009 8:17 PM

Too bad because Germany is doing it and they are selling new vehicles like hot-cakes.

Posted by: JRM2 | March 30, 2009 8:00 PM

Trade-in's and guaranteed warranties? Is Obama running the country or a car dealership?

http://www.political-buzz.com/

Posted by: parkerfl1 | March 30, 2009 7:58 PM

God! How DO some of these Cretinous Morons in Congress manage to keep getting voted in?

Are their Constituents really THAT Dumb?

Autos are short lived, and Economics will defeat Gas Guzzlers all by itself!

What is NEEDED, is a MASSIVE movement to remove dilapidated and dangerous Housing!

What we have, is a Glut of Houses! The ability of Slum-Lords to rent out spaces in Rat-Infested Hell-Holes, and Children to be exposed to Health Hazards in Ghettos and Run-Down Shanties-Or, Colonias!;

SHOULD be the Action Government steps up to Stop!

IF, they actually had a CLUE! :-/

Posted by: SAINT---The | March 30, 2009 6:48 PM

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