WASHINGTON (CNNMoney.com) -- The House on Tuesday waded deeper into the rescue of the troubled auto industry when it passed a $4 billion plan to subsidize new cars sales for consumers who scrap old ones.So, what's this "Phase One" stuff, you ask? Well, I'm guessing there'll be a Phase Two.
By a vote of 298-119, the House approved the "cash for clunkers" program.
The measure would give consumers vouchers worth as much as $4,500 to turn in gas guzzlers and buy new cars that are more fuel efficient.
The legislation now goes to the Senate. President Obama has said he supports such a measure.
Clunkers eligible for the program must get 18 miles per gallon, or less, in combined city and highway driving. The subsidy ends up benefiting more owners of light trucks, SUVs and mini-vans more than it would owners of regular old passenger cars, auto experts say.
A $3,500 subsidy can be used toward purchasing cars and vans that are more fuel efficient than the older clunkers by four miles per gallon. A $4,500 subsidy can be used toward purchasing cars and vans that are more fuel efficient than older cars by 10 miles per gallon.
However, cars that have not been insured for the past year or those that are older than 25 years are not eligible to be traded in for vouchers.
The House measure aims to spend $4 billion in new dollars toward the measure, and was expected to get added through a war supplemental funding bill. That could prove to be a sticking point, since some Republicans in the Senate said they rather such a measure use already allocated dollars.
"We're going to have to pay the piper at some time," said Rep. Jeff Flake, R-Ariz. "This is a clunker of a bill."
The program lasts either one year or until the funding runs out.
Wednesday, June 10, 2009
How's the Five-Year Plan Going, Tovarisch?
Well, we're still in Phase One, so it's hard to say just now:
If When Phase One fails to deliver the requisite jobs & prosperity, I expect our supervisors will take a more ... uhhhh ... direct approach. Democrats will want to simply assign every driver a car (a General Government Motors product, of course), paid for out of Magic Stimulus Money™. Republicans, on the other hand, will introduce legislation requiring every adult American to purchase a new car once every three or four years, and will prescribe Tasing™, waterboarding, or indefinite detention for those who fail to make the purchase. Either way: a Great Leap Forward, no?