ShareThisCongress has enacted a "cash for clunkers" program. Curiously, the way these things work in Washington, it was part of a $106 billion measure to pay to continue fighting the wars in Iraq and Afghanistan.
As a small historical footnote, this may well be the last stand-alone war-funding bill. President George W. Bush paid for the wars through a series of emergency supplemental measures, but President Obama has pledged to include the cost of the wars as part of the regular federal budget.
In that bill was $1 billion for "cash for clunkers," government payments of $3,500 to $4,500 as an incentive to get car owners to trade in their old cars, up to 25 years old, for newer, more fuel-efficient, less-polluting vehicles.
The program's impact on overall fuel consumption and pollution is likely to be minimal. And that billion dollars might generate sales of 250,000 vehicles, not an insignificant number, but not enough to turn around a year in which the industry expects to sell only 10 million vehicles. By contrast, 16 million were sold in 2007.
Plans originally called for $4 billion to spur 1 million in vehicle sales, but apparently someone in Congress got the idea that, hey, money is kind of tight.
Anecdotal evidence suggests that people who drive older cars do so because they have to and that if they could buy a newer vehicle, it would likely be a used one. Used cars are not covered by the incentives.
It will be interesting to see how this program affects charities that raise money by selling off donated vehicles. The clunkers, under the federal program, must be scrapped.
"Cash for clunkers" will benefit the automakers, the dealers and people who were probably going to trade in their car anyway. As for the rest of us, we get to pick up the $1 billion tab.
(Distributed by Scripps Howard News Service, http://www.scrippsnews.com)
