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'Cash-for-Clunkers' Program Runs Out of Gas

By Ben Pershing, Dana Hedgpeth and Sholnn Freeman
Transportation Secretary Ray LaHood called members of Congress on Thursday to inform them that the "cash for clunkers" program will be suspended at midnight because the program has run out of money, congressional sources said.

Members of the House and Senate from Michigan plan to meet at 9 a.m. Friday to strategize on how to revive the program, and they intend to ask the Obama administration to divert some funding from the existing economic stimulus package to maintain a scheme that they see as genuinely stimulative.

"We're going to try to figure out what's a realistic amount of money and get it into the program," Rep. Mike Rogers (R-Mich.) said.

House Speaker Nancy Pelosi (D-Calif.) learned of the shutdown through news reports, her spokesman said, but she pledged to consider next steps in the program.

"We're just learning of news reports concerning the success of this program. We will be working with the congressional sponsors and the administration to quickly review the results of the initiative," Brendan Daly, Pelosi's spokesman, said.

Cody Lusk, president of the American International Automobile Dealers Association, said, "Clearly, this has been a very stimulative program that's got consumers back into the car market. It's our hope that possibly more funds can be made available."

Lusk said his group has fielded hundreds of calls from frustrated dealers who were experiencing computer crashes as they tried to input data into the government's Web site to complete deals.

The $1 billion program was set up by the U.S. government in June. The idea was to entice consumers to trade in their gas-guzzling cars for more fuel-efficient models, both to boost auto sales and improve the nation's fuel efficiency. Money set aside for the program, which started six days ago, was close to running out or may have run out if more consumers turn in their cars this weekend.

By Ben Pershing  |  July 30, 2009; 8:51 PM ET
Categories:  Economy Watch  
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Comments

Oh that's rich.
Let's have Summers and
Geitner keep giving money to
the Robber Barons of Wall
Street while 'Joe the Car
Dealer' gets put out of
business.

Posted by: printthis | July 30, 2009 9:10 PM | Report abuse

Why does anyone think this is a good program? The cost of gas, even if it goes up to $5/gallon is not the significant cost associated with a car.

Wouldn't we be better off to encourage people to keep their cars and get them fixed? It would be better all around; the local mechanic would make a few bucks, we would produce less cars, and people would save money.

Posted by: Ombudsman1 | July 30, 2009 9:11 PM | Report abuse

Obama's administration is a clunker.

Posted by: Bitter_Bill | July 30, 2009 9:12 PM | Report abuse

You got to be kidding!!!!

Posted by: georgethornton1 | July 30, 2009 9:17 PM | Report abuse

The "change" for which so many of our fellow citizens voted has run out of gas. So many promises. So little ability to pick up the tab.

Think the "cash for clinkers" program was expensive? Just imagine the costs--now, tomorrow, and far into the future--of the government's incursion into the marketplace with "health care reform."

We've only begun to see the tremendous cost of the promises and proposals of this administration. It all sounds great until the check comes.

Posted by: ridethestallion | July 30, 2009 9:18 PM | Report abuse

What's really sad is GM which is touting its new Chevrolet Camero, which gets 17mpg and so, after one year of ownership, qualifies for the cash-for-clunkers program. Will someone please tell me why we saved this company with billions of tax dollars? So we could give cash for chevy clunkers so people can buy new chevy clunkers?

Posted by: Fate1 | July 30, 2009 9:19 PM | Report abuse

By all means let us get all those SUVs and pickups getting 16 mpg off the road and replace them with new ones getting 21 mpg. LOL

Posted by: jimbo1949 | July 30, 2009 9:20 PM | Report abuse

"Why does anyone think this is a good program?"

Ombudsman1: You don't understand how the U.S. economy works. We all have to work to earn money to buy stuff we don't really need so that other people will have jobs making that stuff, thereby earning money to buy stuff *they* don't need.

This will cause the Gross Domestic Product to keep increasing year after year. If the GDP keeps rising we can keep telling ourselves that we're getting richer and living better lives.

Posted by: donnolo | July 30, 2009 9:22 PM | Report abuse

Given that the Cash-for-Clunkers program is based on mpg and that foreign cars tend to have superior mpg than domestic cars, it would seem to be a stimulus program for foreign auto manufacturers.

Posted by: ashafer_usa | July 30, 2009 9:23 PM | Report abuse

Alright you klondikes, quit with the ignorant barking and pipe down. The Cash for Clunkers program has been a smashing success. The money has flowed into the economy fast. Obsolete vehicles have been taken out of circulation. Easy now, don't start yipping again, - of coarse they could be 'fixed', like mounting a cadilac crest on a rambler. Don't be so dense. Out with the old, in with the new. A qualified auto mechanic is not out of work these days anyhow. Wow, so it's not such a bad idea. Obsolete technology is taken out, money is pumped into the economy, environmental concerns are addressed, awareness is raised. You greedy short minded nay sayers need to go for a walk, off a short pier.

Thank you

Posted by: ohplease2 | July 31, 2009 12:04 AM | Report abuse

I agree with ohplease2 that this is a great success and more money should be placed in this fund but it seems to me that the Obama's staff can't even handle this program which is small compared to say the "health" program that the gov't wants to run.....please. If they can't handle a billion dollar program that lasted all of 6 days, how could we ever have any confidence that they could be in charge of our medical/insurance problems ?

Posted by: cherylrussell | July 31, 2009 9:33 AM | Report abuse

Basing program on mpg means American clunkers will be exchanged for foreign new cars. Japan is delighted over program.

Posted by: mascmen7 | July 31, 2009 12:16 PM | Report abuse

There may be significant numbers of fraud in the paying of these monies. I was personally contacted by a large and diversified product dealer in the No burbs of Chicago. I will have owned my 2000 Camry CE for just about 9 years. He promised $4500 for the trade. The car is solid of body, and efficient in operation. The lowest MPG I have recorded is well above 20 mpg, average 28-30, and on the highway runs 35-42mpg. Do not think it qualifies as a klunker.

Posted by: maab76 | July 31, 2009 2:00 PM | Report abuse

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