Calls To Extend Cash For Clunkers Car Rebate Program

Officials within the Obama administration said later that the Cash for Clunkers trade in rebate program had not been suspended and that they were studying the situation. Experts outside the capital note that the enthusiastic consumer response is a positive sign for the economy. In light of the billions given to banks and Wall Street it would seem silly to curtail such a highly popular program that directly and immediately benefits Main Street, one economist noted calling for the extension and expansion of the program.

An official White House statement noted that "Auto dealers and consumers should have confidence that all valid transactions that have taken place to date will be honored." An official at the Department of Transportation, which manages Cash for Clunkers trade-in effort, said the administration would try to work with Congress to find more funds to keep it going.

One of the program's main champions, Senator Debbie Stabenow (D. Mich) called on Congress to appropriate more money. Stabenow said the effort has provided an important boost to the economy and resulted in 200,000 car sales.

The Cash for Clunkers trade in program was passed by Congress in June and was originally intended to continue through November 1 or whenever its $1 billion budget has been depleted. An early version of the proposal in Congress called for appropriating $4 billion.

The plan provides those trading in gas guzzling cars July 1 to be eligible for refund vouchers worth between $3,500 to $4,500 on traded-in gas guzzlers. The vehicle being traded in has to get combined city and highway fuel economy ratings of 18 miles per gallon or less. The program aims at helping the struggling automobile industry by taking inefficient cars off the road and spurring new sales.

"With this program, we are giving the auto industry a shot in the arm and struggling consumers can get rid of their gas-guzzlers and buy a more reliable, fuel-efficient vehicle," Transportation Secretary Ray LaHood said in a statement earlier this week. Domestic sales of autos have been hit hard by the recession and credit crunch and helped propel the bankruptcies and government bailouts of General Motors and Chrysler. In June, the seasonally adjusted annual sales rate fell to 9.7 million, a pace well below recent years.

As of Wednesday afternoon, nearly 30,000 Cash for Clunker transactions had already been submitted to the National Highway Traffic Safety Administration, the agency said, with requests totaling almost $96 million in disbursements.