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Cash for Clunkers Update: Incentives End Tomorrow Unless Senate OKs More Funds

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cash-for-clunkers-cars-logoAt least until Tuesday —  that’s the most optimism that the Obama administration could muster this weekend about how long the depleted cash for clunkers program will last without approval of additional funds from the Senate. As we noted last week, the House fast-tracked a bill on Friday to fatten up the cash-for-clunkers coffers with another $2 billion in stimulus funds for the program, which awards vouchers of up to $4,500 for new, more fuel-efficient vehicles when drivers trade in older gas guzzlers. But with House lawmakers now on a month-long break, the Senate has two choices: Go along with the House proposal for adding funds, or let the program be suspended.

Since House lawmakers left for a month-long break after greenlighting their version of the bill, the Senate doesn’t have the option of tweaking the legislation this week (before its own month-long break) and then working with the House to come up with a compromise version. As Reuters explains, “This is a potential problem for ‘clunker’ supporters,” because many senators are against providing additional incentives “to help an industry that has received more than $80 billion in government assistance since January.”

Other senators, including Susan Collins (R., Maine) and Dianne Feinstein (D., Calif.), say they won’t approve more funds without some green strings attached, the Wall Street Journal reports. As we’ve explained before, the cash for clunkers proposal that ended up getting the OK in June beat out a competing proposal that wouldn’t have taken fuel efficiency into account at all in the criteria for trade-ins, but represented only a marginal win for fuel efficiency, since the MPG requirements are relatively modest. So this week’s negotiations over additional funds could be an opportunity to raise the bar.

For car owners and dealers looking to cash in on the program, what you need to know at this point is that the Obama administration plans to make good on any deal that enters the pipeline today or tomorrow. (To find out if your old clunker can qualify for a voucher, check out our FAQ.) After that, it depends on what happens in the Senate. Stay tuned.