Philip D. Brown

Richmond County Daily Journal

Lawmakers put the pedal to the metal to provide $2 billion in additional funding for the hugely popular Cash For Clunkers incentive-based program to stimulate the auto industry.

The program nearly became a victim of its own success when the July 24 official announcement of the program’s initial $1 billion budget caused consumers to flock to dealerships to see if they could qualify to trade gas guzzlers for credit to buy or lease a more environmentally-friendly ride.

“They’re talking about suspending it, not canceling it, because the fear is there may be so many applicants the program will have spent the money,” GM Superstore Owner Jeff Dieffenbach explained Friday after reports surfaced in major media outlets Thursday night the program may have out-stripped its funding. “If all the money really is gone, that means 250,000 automobiles were sold.”

Dieffenbach’s Rockingham dealership featured a garbage truck with an older model car in the back advertising the program in front of its lot this week.

He said the interest in Cash For Clunkers was overwhelming, and suspending the program until another allocation can be designated would protect car dealers from committing themselves to tens of thousands of dollars worth of trades they may not be able to recoup. In Rockingham alone, dozens of people inquired about the program on a near-daily basis.

“When the rules for the program were published, it caused a huge onslaught of applications to be processed - so much so that they’re having difficulty processing them to find out how many there are,” Dieffenbach said.

The Associated Press reported the bill was approved on a vote of 316-109, after House members acted within hours of learning from Transportation Secretary Ray LaHood that the program was running out of money.

The additional funding will come from money that were already approved by Congress in the $787 billion stimulus bill.

The actual name of the stimulus program is the Car Allowance Rebate System, or CARS, and is intended to cut greenhouse gas emissions and address the nation’s dependence on foreign oil, as well as drum up business for auto makers and dealers.

Basically, consumers can trade in a car that gets 19 miles per gallon or less, is 25 or less years old, has had continuous insurance and registration for a year and is in good driving condition for a $3,500 to $4,500 discount off the sticker price for a new fuel-efficient car.

House Majority Leader Steny Hoyer told the AP the new money for the program would come from funds approved earlier in the year as part of an economic stimulus bill.

President Barack Obama also came out in full support of the program Friday, praising the efforts of legislators from both parties for their speedy response.

He was quoted in an AP article saying there were initially skeptics over the program, but that now “we’re already seeing a dramatic increase in showroom traffic” across the country.