Cash for Clunkers
By Debbie Maskin, IEN Staff
January 23, 2009 --Depending on your circumstances, this might be the best of times or the worst of times to finally get that new car you covet. Great deals are out there, but the economic future is uncertain. If you’ve been sitting on the fence, the Senate has proposed a measure that could help you, the automakers, and the environment. The so-called Cash for Clunkers program would provide credit vouchers of $2,500 to $4,500 to drivers who turn in older, fuel-inefficient cars, trucks, or SUVs to be scrapped for the purchase of a more fuel-efficient vehicle. The traded-in vehicles must have done no better than 18 mpg when new, be in drivable condition, and have been registered for at least the past 120 days.
Eligible drivers would receive a reimbursement voucher for the purchase of a new or used vehicle with a fuel economy rating that exceeds the CAFE target for that class of vehicle by at least 25%. The bill also requires that the voucher be used towards the purchase of a vehicle that has an MSRP of less than $45,000, is model year 2004 or later, and meets or exceeds federal emissions standards. Vouchers could also be redeemed for transit fares for participating local public transportation agencies. Introduced by U.S. Senators Dianne Feinstein, Susan Collins, and Charles Schumer, the program would operate from 2009 to 2012 and is expected to send up to 1,000,000 vehicles per year to the scrap heap.
The American Council for an Energy-Efficient Economy estimates that the issuance of 500,000 to 1,000,000 vouchers per year could provide the following environmental benefits:
- Save between 40,000 and 80,000 barrels per day of motor fuel by the end of the fourth year .
- Reduce nitrogen oxides, which cause ground-level ozone, a leading cause of respiratory health problems, by 3,043 short tons by 2013.
- Reduce greenhouse gas emissions from 6.6 million metric tons to 7.6 million metric tons, or the equivalent of removing 1.1 million to 2.2 million vehicles from the road in one year.
Supporters claim the bill, if enacted, will be a win-win-win situation: it will help the automobile industry, the environment, and Americans who might fare better than they would at a car dealership. Although I hesitate to criticize anything resembling a bipartisan effort these days, to me it seems like just another use of taxpayer dollars to buy up toxic assets -- be they bad mortgages or polluting cars. Only time will tell how good these investments are.