Cash for Clunkers Hits Goal in Five Days!

As a co-architect of the federal Cash For Clunkers (CFC) program and advisor to various congressional offices on the issue, it is gratifying to see how quickly it has been adopted by the American people. CFC achieves multiple goals -- it stimulates auto sales while increasing the efficiency of the U.S. fleet.

Congress passed the program in June of this year and it went into effect this past weekend. The $1 billion has now been used up in one week! That translates to more than 250,000 guzzlers and pick-up trucks traded-in for more efficient cars.

In the original bill, HR 520 and S. 247 the sponsors were aiming for higher efficiency gains. Those gains got watered down in the compromise bill of HR 2751. Now that it is clear how popular this program is I urge Congress to re-up the program with increased miles-per-gallon gaps between the vehicles traded in and bought.

The Cash for Clunkers program in Germany initially received 1.5 billion euros and when that was used up received another 3.5 billion euros. That translates to a $6 billion CFC program for a country with a much smaller market than the U.S.

Prior to the CFC program, automakers were selling cars at an annualized rate of 9.5 million vehicles for 2009. That compares with sales of more than 15 million cars only a few years ago. CFC will boost auto sales if we continue the program.

Given the dire state of the automakers in the US and the need to move away from oil before it spikes back to more than $100 per barrel we should add billions to this program.

American have voted with their feet and their wheels - they want to dump their clunkers and get more
efficient. They want to do their part to stimulate our economy - now it is up to Congress to do its part.

UPDATE - The house passsed a bill giving the program an additional $2 billion of funding. Unfortunately, they took it from the renewable energy loan guarantees. We should take the money from TARP - not from clean energy. Now the focus is on the Senate who was not consulted by the House before the House left town for weeks of vacation while consumers are feeling the pinch.

The author is Chairman of