‘Clunkers’ program out of money?by Tim Manni
That’s what the rumors say:
Congressional officials say the government plans to suspend the popular “cash for clunkers” program amid concerns it could quickly use up the $1 billion in rebates for new car purchases.
The Car Allowance Rebate Scheme (CARS) program is only in its first week, but nearly 23,000 vehicles have been approved — and there’s such a backlog that the government fears the money may already have run out:
As of late Wednesday near 23,000 vehicles had been registered as sold under the system, meaning that $96 million of the money had been used. However, the operative word there is “registered”. In order to qualify under Cash for Clunkers the dealers have to complete what is said to be a complex registration process. Some 100 pages of rules governing it and there are reports that it can take as much as 90 minutes to complete a single registration on the correct computer system run by the NHTSA. There are also reports that the system is so overloaded that dealers are being bumped off half way through and they then need to start all over again.
Given all of the hype drummed up over the CARS program, the most likely outcome is that Congress will choose to appropriate more cash to it. There’s also a larger lesson here:
A government program, passed in a hurry with no real planning or forethought to it, hampered by an entirely inadequate computer system, blasts through its entire four month budget in only four days and thus causes chaos.This does not bode well for the various plans for national health care now, does it?
Update: Well, that didn’t take long:
The U.S. House approved an emergency $2-billion infusion for the cash-for-clunkers program this afternoon, with a plethora of lawmakers from around the country calling it a runaway success that should not be ended.
But the head of the National Automobile Dealers Association warned dealers today that until the money was guaranteed, they could be on the hook for any cash-for-clunkers trades despite assurances from the Obama administration that deals through today will be honored.
With the House set to adjourn today for a monthlong recess, House Democratic leaders worked through the night to craft a bill carving $2 billion from an energy loan program that was part of the $787 billion economic stimulus plan passed earlier this year.