Pelosi: ‘Cash for Clunkers’ Bill

[AL BUNDY]

Pelosi: ‘Cash for Clunkers’ Bill a Benefit to Our Economy and to Our Environment

http://speaker.house.gov/newsroom/pressreleases?id=1219
Press Releases Contact: Brendan Daly/Nadeam Elshami 202-226-7616 For Immediate Release 06/09/2009 Pelosi: ‘Cash for Clunkers’ Bill a Benefit to Our Economy and to Our Environment
Washington, D.C. – Speaker Nancy Pelosi spoke on the House floor this afternoon in support of H.R. 2751, the so-called “cash for clunkers’ bill, which will allow consumers to trade in their old, gas-guzzling vehicles and receive vouchers worth up to $4,500 to help pay for new, more fuel efficient cars and trucks. The legislation passed by a strong bipartisan vote of 298 to 119. Below are the Speaker’s remarks.
“I thank Congresswoman Sutton, Representative Israel, Representative Inslee — all of whom worked very hard to come to a position that we can all support today. Mr. Markey is Chair of the Select Committee and of course, Mr. Dingell, the Chair Emeritus of the Energy and Commerce Committee. Others — Mr. Braley, Mr. Stupak — well, all of our colleagues have had an important role — Mr. Kildee, and our colleagues on the Republican side of the aisle.
“Hopefully we’ll have a good, strong bipartisan vote today on this legislation because you all have given us an opportunity to pass legislation that is a benefit to our economy and a benefit to our environment. We can create and save jobs while addressing the air pollution issue, which is so important to our children’s health.
“We will do this by allowing Americans to trade in their old, gas-guzzling vehicles and receive vouchers worth up to $4,500 to help pay for the new more fuel-efficient cars and trucks. This bill is quite a remarkable piece of legislation and the timing is perfect. And when they trade in these cars, they will strengthen America’s auto industry, creating jobs and reducing layoffs and save more than 250 million gallons of gas.
“This has been tried and true around the world in recent months with great success — in Germany, for example, it boosted auto sales by 20 percent. Because this legislation will deliver consumer savings, increase vehicle demand, help save American jobs, while cutting greenhouse gas emissions, and reducing our dependence on foreign oil, it is supported by a broad coalition. That coalition includes the Big Three automakers, the United Autoworkers, car dealers, business groups such as the National Association of Manufacturers, the Chamber of Commerce and in the lead, the Obama Administration.
“Today, with this legislation, we will ensure a strong, American manufacturing base. As much as anything that we can do, in terms of addressing the auto industry in our country, this is a national security issue. The auto industry success is essential to ensuring that we have a strong manufacturing base. This legislation today will ensure that we have a strong manufacturing base and get more fuel-efficient vehicles on the road, which is essential to our economy, to our national security, and a clean, green future.
“Once again, I commend Congresswoman Sutton for her determination to accelerate the pace of when we would bring this legislation to the floor and I urge a strong, bipartisan support for the bill, which it certainly deserves.”

How long until it's mandatory?

 

[woody]

Did anyone else notice that the vehicles traded in for these 'clunker' vouchers will have the engines and transmissions removed and destroyed?

Some other interesting bits of 'fine print' are:

There are different levels of voucher, varying on the class of vehicle being junked/replaced, and what it's MPG was & is...

The vehicle being junked must be "registered and in service" for one year. I guess my plan of re-tagging one of my s#!tboxes isn't completely unpossible, just would have to wait a year from that date to cash it in. Although that could be a loophole... the box in jeapoardy was registered and in service -to & by me- for much longer than one year... I'll have to look closer and see if "registered" and 'in-service" are concurrent reqs... I use the box to pull down trees, scare the neighbors etc... not tagged though....so technically it IS in service.

I also heard that the bill would prevent the resale of (all) used/salvage engines and transmissions, however that may have been someone exaggerating... basing a rumor off the facts outlined in the news. If someone could post a PDF of the actual bill (not some newsgroup's summary) I'll drill into the fine print.

It would really suck if I have to chase down spare engines for all my old junk before this thing takes effect.

 

[muddyrocks]

Does anyone else see that this raises the minimum resale cost for an old box?

Tough to get ahold of a decent old waggy on the cheap if the owner has the ability to regain 4500 dollars from the fed for it. (Or what ever the amount works out to be, it seems it would be a set low dollar amount).

 

[AL BUNDY]

"Does anyone else see that this raises the minimum resale cost for an old box?"
-Exactly.

This cash for clunkers is full of problems and unintended consequences:
1.) Economist, Freakonomics author and New York Times blogger Steven Levitt writes, “People who drive clunkers are generally not in the market for new cars. Presumably their replacement car will be a used car. The increased demand for used cars will lead to higher prices for used cars, which will push some buyers towards a new car, but the likely impact on new cars would be small.”
2.) This program would distort the used car market in a couple of ways. If the idea is to get older cars off the road, the supply of used cars will be reduced at a time when demand has been increasing. This will raise the sticker prices of used cars for people who can barely afford them in the first place. Because the program would scrap a relatively small percentage of used cars and parts, the effect may be marginal, but it’s still a market-distorting policy.
3.) This bill would put every charity car donation program in the nation out of business since the amount of the voucher would be much greater than the tax deduction.Simply do a Google search of “Donating Cars for Charity” to see how many organizations this would affect.
4.) The environmental benefits are questionable. Maybe a few more miles-per-gallon improvement will emit less carbon dioxide per mile, but increased fuel efficiency often leads to more driving because people know they’re getting more miles to the gallon. Furthermore, the excitement of buying and driving a new car entices people to drive more. New cars are “[...] typically driven between 15,000 and 18,000 miles a year in its first three years of ownership, while a car owned for 10 years is driven between 5,000 and 6,000 miles a year and a 15-year-old car is driven only 2,000 miles on average.” There are also the pollution costs of actually building a car and the disposal of a car to be considered, rather than just the pollution caused by driving the vehicle.
5.) Proponents of the bill point to Germany’s boost in car sales as a reason to enact the program in the United States, but Germany’s incentive structure for buying new cars is much different ours. Gas prices in Germany are $5.50 per gallon, forcing people to switch to smaller cars. Their government also put in place other tax breaks and incentives on top of their cash for clunkers provision. And it may not have as big an impact on stimulating Germany’s economy as previously thought; the program instead simply shifted spending: “Retailers, for instance, say the bonus is shifting spending patterns rather than creating demand. Higher February car sales coincided with falling turnover at consumer electronics stores. Stefan Genth, managing director of the HDE retailers’ federation, slammed the bonus last week, saying it was ‘sucking out spending’ from the retail sector.”
6.) Clearly this won’t be a costless program – it’s estimated to be $4 billion in taxpayer money from the $787 billion stimulus bill. Chump change, right? But if the program in Germany does provide any forecast, it will cost more. In Germany’s case, the program has become three times more expensive than what they initially budgeted.
This is a good example of economic Frederic Bastiat’s broken window fallacy, except that instead of breaking windows to “stimulate the economy”, we’re destroying perfectly good cars. Meanwhile, we’re asking consumers to purchase cars they might not be able to afford and incur more debt. Sounds strangely reminiscent of the home mortgage crisis, don’t you think?

 

[scottmcneal]

I hope the next time she flys home for lunch they drop her off in the bay..

 

[FlexdXJ]

I'll be glad to get a small fuel efficient car but My XJ isn't going anywhere anytime soon!

 

[IslanderOffRoad]

I'll start hoarding old cars if this passes. If they're massively getting rid of them values will skyrocket in the future.

 

[WB9YZU]

I don't know that "if it passes" is an option.
The bill was introduced the 8th, and the house passed it right along party lines on the 9th after suspending the rules.

I expect that the senate will green light it also, then on to the President who I expect to sign it.

There are limitations on how many cars any individual can turn in. I believe it is one.
Used car prices had been rising as new car prices went though the roof and gas got expensive. I don't know what impact this will actually have in the long run. As someone stated, those who can't afford a new car still won't be able to afford a new car.

Here is a link to the bill http://thomas.loc.gov/cgi-bin/bdquery/z?d111:h.r.02751:

Slightly unrelated, I have been seeing an ungody number of Challengers everywhere. It's like they're giving them away

-Ron

 

[woody]

I'm not exactly a tin-foil hat type, but based upon the events of recent history, if the job were handed to me -the job of dry-fxcking the working class in a fresh new hole- here's how I would whip it out:

#1 Seize control & parcel out the industry to those who did play along (unions), and in the same raid, 'consolidate' the dealer network to shed the ones who didn't play nice - ie- contribute to my peeps.

#2 Offer subsidies to the customer base: Sales tax rebates, cash-off vouchers, etc. AKA "The carrot" "Bait" etc...

#3a Create disincentives and obstacles to maintaining an older vehicle: Oppressive emissions & inspection standards, reduce or control availability of "key" repair parts, increase the supply of modified fuel stocks -which cause harm to un-modified older engines. Pin registration fees to some arbitrary standard, like curb weight, MPG, GVWR...

#3b Create parallel disincentives and obstacles to operating an independent repair shop: Uber-expensive emissions test/diagnostic equipment and/or bonding reqs, requiring that any service (while under manf. warranty) be performed at a dealer.

I suppose they could also set up a end of service life deal too... like deny or make it financially repressive to apply for re-registration to any vehicle over XXXXX miles or X years (Creating a false and continual 'demand' for current product.)

Like I say in a post above, I'd need to read the actual bill to judge how dryly screwed we are, and what steps I might want to take in preparation.

One question I have is: Are these "vouchers" good for domestic vehicles only, or could one junk a 79 Donk-tastic 305 Caprice for a "cents off coupon" towards a new Acura? As I understand it, the sales tax write-off is for both domestic & import products (cars, trucks, bikes)

 

[WB9YZU]

Nowhere in the bill did I see the words "American Made". All I saw was "2 mpg or better".

This is not a patriotic "save our auto industry" bill. This is "eliminate greenhouse gases and save fuel" bill pushed by the Democratic Party.

-Ron

 

[1985xjlaredo]

Can't get the link to work.
So now all cars are going to cost more than 4500 dollars! Guess that will force alot of people to use public transit. Give it 10-15 years and only wealthy people will be able to afford a 2-3 car life style. Definitely a good way to further the gap between rich and poor. And what a way to stump the economic growth of 16-18 year olds. I know I couldn't afford a 4500 dollar car when i was 16. And say good buy to junk yards and pick n pulls across America.

 

[NWPhotog]

Nowhere in the bill did I see the words "American Made". All I saw was "2 mpg or better".

This is not a patriotic "save our auto industry" bill. This is "eliminate greenhouse gases and save fuel" bill pushed by the Democratic Party.

-Ron

I think it is more get the fing economy going bill.

 

[XJEEPER]

Which it hasn't.....nor will it.

 

[GrimmJeeper]

I think it is more get the fing economy going bill.

are you searching the boards looking for debates on this subject now?

 

[tbburg]

I'm not exactly a tin-foil hat type,

Maybe we all should be:
Glen Beck clip, Via Hot Air
Seriously, take a minute to read the post and watch the video. I'm guessing typical incompetence/stupidity, but still, WOW!


Where's my damn tin foil,...

 

[CanMan]

are you searching the boards looking for debates on this subject now?

He's bored waiting for his boyfriend to get back from getting ice cream, cream puffs, and getting something pumped for him.

:flame:

 

[XJEEPER]

We need more than a foil hat to protect us from the current.....or past administrations. We need concerned Citizens.....no, we need Citizens who are pissed off and tired of our elected officials dealing away our Freedoms for their own personal gain, to stand up, be vocal and take action.

 

[Ecomike]

Can't get the link to work.
So now all cars are going to cost more than 4500 dollars! Guess that will force alot of people to use public transit. Give it 10-15 years and only wealthy people will be able to afford a 2-3 car life style. Definitely a good way to further the gap between rich and poor. And what a way to stump the economic growth of 16-18 year olds. I know I couldn't afford a 4500 dollar car when i was 16. And say good buy to junk yards and pick n pulls across America.

First, I agree with XJEEPERs last post, at least related to this bill.

But I just did the math on this, and the first funding for this only lasted 1 week before it used $1 billion dollars, according the news I have seen. Congress is trying to increase the funding for it, $2 billion more, but even that added amount (which is in some doubt) they are talking about would only last another 2 weeks at the rate people jumped on the deal.

From what I heard, this deal will not be fundable a third time, so my read on this is it will be history in 1-2 months, because the government is broke now, and can't afford to fund it forever.

So if you want in on the deal, don't wait if it gets a second round of funding, is it might go faster than first time as people fear missing out on the deal and rush to dealers. If you fear this will become permanent, and skew the prices of used cars, used parts, and so on, I think it would take funding of 50 to 100 billion a year in my opinion for that to happen.

The US sells (currently) something like 10 million new cars a year. The first billion only covered trashing 222,222 vehicles, hopefully some were fereign clunkers, like Toys, and not XJs, LOL.

Oh, and if we are smart, we will all start checking the local Jys over the next month for easy parts pickins (that did not get killed) while they last!