U.S. weighs 'cash for clunkers'

April 02, 2009|By Jim Puzzanghera and Ken Bensinger | Jim Puzzanghera and Ken Bensinger,Tribune Washington Bureau

WASHINGTON - The road to recovery for U.S. automakers could be jammed with hundreds of thousands of gas-guzzling used cars, which President Barack Obama hopes will be traded in for more fuel-efficient vehicles - with the lure of government money.

"Cash-for-clunkers" programs have worked well in Germany and France this year to spur new car sales. But the initiatives have not fared so well in Southern California, where the aim in recent years has been focused on reducing smog. Roadblocks to a national plan abound, including a potentially huge cost.

The idea of stimulating new car sales by coaxing old cars into the scrap yard is gaining bipartisan speed in Washington amid federal efforts to reshape a U.S. auto industry that on Wednesday released dismal sales figures for March.

"The simple reality is, we have got to get American consumers to buy automobiles," said Rep. Candice Miller, a Michigan Republican.

She is among 19 lawmakers co-sponsoring a bill by Ohio Democratic Rep. Betty Sutton that would offer $3,000 to $5,000 to owners who scrap an old car and buy a new one. Sen. Dianne Feinstein, a California Democrat, is leading a bipartisan group pushing similar legislation in the Senate.

Either plan would cost $1 billion to $2 billion a year, or more.

Supporters said the legislation would help save automakers and the environment, with both bills forcing the older cars to be scrapped.

U.S. car companies strongly support the idea, with a General Motors executive Wednesday saying it could increase new car sales by 1 million to 3 million vehicles annually.

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