Congress Giving "Cash for Clunkers" - 1/23/09

Congress is considering paying people to do away with their gas guzzlers.

 In Congress Wednesday Legislation introduced the "Cash for Clunkers" program; drivers would get a voucher of up to $4,500 by turning in their fuel-inefficient vehicles for scrapping.  Drivers would then be able to use the voucher to buy fuel-efficient vehicles.

Senator Dianne Feinstein, D-Cal. said it would be an important step in helping America’s struggling auto industry get back on its feet.  Senator Susan Collins, R-Maine co-sponsor of the legislation said, "Taking gas guzzlers off the road would stimulate the economy."

The program would operate for four years and could take up to 1 million gas guzzlers off the road saving up to 80,000 barrels of fuel a day by the end of the fourth year.

The $4,500 voucher would only be eligible for purchasing a new or used vehicle with a fuel economy rating that exceeds federal targets for that class vehicle by at least 25%.  Also, to be eligible the retail price must be less than $45000 and be a 2004 model or later.

The vehicles that can be turned in for the voucher must be drivable and registered in the U.S.  They also must have a fuel economy rating of less than 18 MPG.

The first year of the program would give a driver turning in a qualified vehicle a $4,500 voucher for the purchase of a new vehicle or $3,000 for the purchase of a used vehicle that met the fuel economy standards.  For drivers trading in a 1999 to 2001 vehicle, they would receive a $3,000 voucher for the purchase of a new vehicle.  Drivers turning in a vehicle 1998 or before would receive a $2,000 voucher for a new vehicle.

The cost of the program would be estimated at $1 billion to $2 billion a year. 

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