Cash for Clunkers is Another Bailout for the Auto Industry
Nicolas Loris /
Today, the Senate could pass a Food and Drug Administration bill that would grant the agency new authority to regulate tobacco products. Slipped into that bill is a newly introduced amendment that would, for one year, attempt to boost car sales and reduce carbon dioxide emissions:
Sens. Debbie Stabenow, D-Mich., and Sam Brownback, R-Kan., introduced an amendment Tuesday that would set up a program that allows consumers with older, less fuel efficient vehicles to trade in their “clunker” for a voucher worth up to $4,500 toward the purchase of a new car that must get at least 22 miles per gallon or an SUV or pickup that gets at least 18 mpg — clearly a focus on U.S. manufacturers. Buyers of small trucks and SUV’s fare better. If the new vehicle gets at least 2 mpg more than the “clunker,” a $3,500 voucher is issued; for new trucks or SUV’s getting more than 2 mpg, the new car owner gets $4,500.”
On paper, it sounds great. $4,500 for a more fuel-efficient vehicle. Everyone loves more miles to the gallon. But there’s the law of unintended consequences and the cash for clunkers program is no exception.