Monday, August 3, 2009

Cash for Clunkers.

'Clunkers' Critics Question Move to Extend Funding for Program
Senate Republicans are raising concerns that extending the "cash for clunkers" program would use deficit spending to pay for a program that, according to its supporters, has already met its objectives.

The cash for clunkers exchange program has turned lawmakers into victims of their own success. Now some senators are questioning why taxpayers should continue to foot the bill for something that, according to supporters, has already achieved its goals.

The program, approved in June, pays people to trade in their gas-guzzling "clunkers" for new, fuel-efficient cars. It has helped boost auto dealers' sales numbers, and it's gotten a heap of inefficient vehicles off the road.

But the program, which was set to expire on Nov. 1, has already spent pretty much all of the $1 billion the government set aside for it, leading Transportation Secretary Ray LaHood to say that the "wildly popular" program should be extended with additional funds.

The House voted to give the program a $2 billion lifeline on Friday, and LaHood now is putting pressure on the Senate to approve the extension before it adjourns for August recess at the end of the week. He said Monday he expects it will pass.

A senior Democratic adviser told FOX News that Senate leaders hope to act on the extension later this week.

But there was never a mandate in the original legislation that said the program had to last until November.

"Program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first," reads the government Web site for the "clunkers" program.

The exhaustion of funds simply came before the expiration date. Republicans are suggesting it's too late to change the allocation now.

I just think this is a great example of the stupidity that's coming out of Washington right now," Sen. Jim DeMint, R-S.C., said on "FOX News Sunday," adding that the Senate needs to "slow this thing down."

"We estimated this would cost $1 billion," DeMint said. "Now they're saying we need $2 billion more. Our children and grandchildren can't afford to make these car dealers well right now."

Sen. John McCain, R-Ariz., has threatened to block the bill.

Senate Minority Leader Mitch McConnell, in prepared remarks, said Monday that the lifeline request just shows how poor the original spending estimates were.

Though supporters are talking about pulling the additional $2 billion from existing stimulus funds, that hasn't quelled Republican concerns.

McConnell spokesman Don Stewart said that cash is still "borrowed money."

"They can say it's paid for, but it's paid for with a credit card. ... It's like making your minimum payment through a cash advance of another credit card," he said.

However, because the "clunkers" program was originally authorized at $4 billion -- not $1 billion -- some supporters had wanted to review its funding this fall anyway to see if more money could be allocated.

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