Update: Details of US Car Scrappage Scheme Emerge

Jeff Puthuff
by Jeff Puthuff

In a follow up to E. Niedermeyer’s previous post, details have emerged about the scheme to give rebates to buyers who trade “clunkers” for new, fuel-efficient vehicles. FT.com (Financial Times) reports that the program will cost taxpayers about $4 billion and will spur, according Brian Johnson, an analyst at Barclays Capital, the sale of 3 million units in the “near term” (whatever that means). With the US’ SAAR projected at approximately 9 million, this is a very optimistic prediction.

Critics are calling foul re: the scheme’s new-cars-only requirement. Used-car dealers and parts distributors “contend that the legislation will distort the market by pushing up prices of older used cars while depressing trade-in values for newer ones,” reports FT. Critics contend that people who would have purchased a used vehicle will opt for a new one instead.

Sure to be controversial is the clause that domestic and foreign vehicles will be eligible. “Foreign carmakers and their dealers lobbied hard against the original proposals, claiming they would be difficult to implement and ignored the contribution of companies such as Toyota, Honda and Nissan to the US economy,” writes FT. Why shouldn’t they be included seeing as many Americans are employed by Toyondasan? As long as the pie is being served, they ought to be allotted a slice.

Aye, but there’s the rub. The scrappage scheme is a provision to be added to the hotly (so to speak) contested climate change bill that is currently (and has been for weeks) stuck in the House of Representatives Energy and Environment Subcommittee. Energy and Commerce Chairman, Henry Waxman (D-CA), wants to fast track the bill to get it out of committee by the Memorial Day recess. ”I’m still holding firm on my deadline to get a bill out of committee by the end of May and I believe that will probably require us to go right to the full committee and bypass the subcommittee,” Waxman told reporters. According to Politico.com, “Negotiations over the bill have been slowed by a dozen Democrats who want to cushion regional interests like steel factories, oil refiners, and coal plants from major price increases.” Waxman made his remarks just hours after Democrats on the committee met with President Obama at the White House.

The Hill reports, “The timeframe could be difficult, given Capitol Hill’s busy agenda and a lack of consensus on the varying proposals in the energy plan. Rep. Chris Van Hollen (D-MD) has said the House should proceed cautiously on climate change. In an interview last month with The Hill, Assistant to the Speaker Van Hollen suggested a vote might not take place this year.”

By then it may be too late for the scheme to make a difference.

Jeff Puthuff
Jeff Puthuff

Early 30s California guy driving a 97 Infiniti I30. Past cars: 90 Cavalier, 82 Skylark, 78 Courier, 61 Beetle.

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  • Wsn Wsn on May 06, 2009

    I have a suspicion that Obama is really a spy hired by big oil companies. His fake green policies are really intended to mess up with conserving energy. Just look at this proposal: 1) More energy is wasted by producing cars that no would buy without taxpayer compensation. 2) The policy makes inefficient used cars worth more than efficient ones. I consider myself a tree-hugger and I am disgusted by all these fake green policies. If you want green, simply slap a $3/gallon tax on gasoline. If you want green and want to stimulate the economy, simply slap a $3/gallon tax on gasoline and reduce payroll tax by the same amount.

  • GS650G GS650G on May 06, 2009

    So are they any passenger automobiles assembled within the US that get over 30 MPG? Well maybe there are but probably not made by UAW members. In the final version of the bill only Obama Motors cars will be eligible. Mark my words.

  • Lynchenstein @EBFlex - All ICEs are zero-emission until you start them up. Except my mom's old 95 Accord, that used to emit oil onto the ground quite a lot.
  • Charles The UAW makes me the opposite of patriotic
  • El scotto Wranglers are like good work boots, you can't make them any better. Rugged four wheel drive vehicles which ironically make great urban vehicles. Wagoneers were like handbags desired by affluent women. They've gone out of vogue. I can a Belgian company selling Jeep and Ram Trucks to a Chinese company.
  • El scotto So now would be a good time to buy an EV as a commuter car?
  • ToolGuy $1 billion / 333.3 million = $3 per U.S. person ¶ And what do I get for my 3 bucks -- cleaner air and lower fuel prices? I might be ok with this 🙂🙂