Late Thursday evening, the House and the Senate agreed on terms for the Cash For Clunkers program. The program was approved by the House on Tuesday, but the Senate wanted to see some modifications to the plan before they would pass the bill. However, the House version of the bills was agreed upon on Thursday and now awaits a vote next week.
The bill is part of the government's wartime spending effort that is aimed at boosting sales of automobiles. The wartime spending bill is a $106 billion bill, but only $1 billion will initially go to the clunkers program.
Next week, the House and the Senate are expected to vote on and pass the bill. The initial funding of $1 billion will only fund the program through September 30th. Both the House and the Senate will seek an additional $3 billion in funding to support the entire program.
Sen. Stabenow of Michigan was one of the key proponents of the House version of the bill and instead sponsored a Senate version of the bill which had higher mileage requirements and required additional government funding. Stabenow now said she was comfortable with winning approval for money to start the program, with the idea that additional funding could be approved later.
The clunkers program allows owners of cars that achieve a combined 18 mpg or less rating to trade in for a voucher towards a new vehicle. If the new vehicle is rated 4 mpg better than the turned in vehicle, the voucher is worth $3,500 if the vehicle is rated 10 mpg better than the old one, the voucher is worth $4,500. Trucks are also eligible for vouchers up to $4,500.
All vehicles that are turned in would be scrapped and thus removed from the roads forever.
The aim of the program is to boost auto sales by distributing vouchers to buyers, but the program will also reduce our use of gasoline and remove potentially dangerous vehicles from our roadways.
We will update you when the House and the Senate vote this bill into law next week.