Bailout Watch 520: Clunker Bill, Retooling Loan Double-Down Move Forward

Edward Niedermeyer
by Edward Niedermeyer
bailout watch 520 clunker bill retooling loan double down move forward

Who would have guessed it? As soon as we start reflecting on what exactly this little government foray into the auto sector will cost us, DC goes and prepares to bump up the sum. From ABC News comes a report that Democrat wranglings on the upcoming climate bill have yielded a compromise on forthcoming “cash-for-clunker” provisions. Details are still sketchy, but according to ABC, “under the new agreement, consumers will be able to trade in a “clunker”—a car that gets 18 miles per gallon or less—for a voucher for a new fuel-efficient car. The amount of the voucher will range from $3,500 to $4,500, depending upon the fuel efficiency of the new vehicle.” Want more details? Too bad. All you get for now are the assurances of one John Dingell (D-MI) that “it’s a good agreement. It means sales of autos, it means fuel efficiency and it means progress.” No word on cost to taxpayers, limits, “buy-American” clauses or other potential sources of trouble.

Speaking of Michigan reps stepping up to reward decades of auto industry campaign contributions, Rep Sander “Tweedledum” Levin has introduced legislation to double the Department of Energy’s $25 billion industry retooling loan program. “It is vital that the federal government be a full partner to the domestic auto industry’s efforts to build the cars of the future,” Levin tells DetN. “The program has already received applications for loans well in excess of the resources available, and we need to move quickly to ensure that all eligible investments are able to participate.” Because otherwise you can just kiss your $60K+ Tesla Model S and $40K Chevy Volt goodbye. The DOE has received requests for $38 billion so far, and clearly all of the requests are worth spending taxpayer money on. Why question it? Incidentally, the DOE loan program was the topic of TTAC’s Bailout Watch #1. Little did we guess where we’d be just a year and a half later.

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  • Skor Skor on May 05, 2009

    My old clunker has an estimated mileage of 19MPG when new. Crap! I lose by 1MPG! I was actually looking forward to a new Fiesta.

  • AJ AJ on May 06, 2009

    With all these Federal programs, I'm sure it will require more Federal employees to manage the program. All at the cost of the taxpayer. And will John Dingell be okay with using the credit on a Honda? I bet not...

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  • Alan I would think Ford would beef up the drive line considering the torque increase, horse power isn't a factor here. I looked at a Harrop supercharger for my vehicle. Harrop offered two stages of performance. The first was a paltry 100hp to the wheels (12 000AUD)and the second was 250hp to the wheels ($20 000 (engine didn't rev harder so torque was significantly increased)). The Stage One had no drive line changes, but the Stage Two had drive line modifications. My vehicle weighs roughly the same as a full size pickup and the 400'ish hp I have is sufficient, I had little use for another 100 let alone 250hp. I couldn't see much difference in the actual supercharger setup other than a ratio change for the drive of the supercharger, so that extra $8 000 went into the drive line.