WASHINGTON - -The popular "cash-for-clunkers" program in which the federal government put up $3 billion to reward car owners who traded in older vehicles for newer, more fuel-efficient models, will end Monday evening, according to the Obama administration.
The program, which offered rebates of $3,500 or $4,500 to car buyers, proved wildly popular. The initial $1 billion in funding was snapped up so fast that Congress swiftly approved an added $2 billion before leaving for its August recess.
Critics have complained of administrative confusion and excessive haste in committing the money, and some dealers have expressed concern that they were not being reimbursed quickly enough.
But the White House contends that the speed with which the money has been committed is a measure of the program's popularity.
"This is actually a high-class problem to have - that we're selling too many cars too quickly and there's some backlog in the application process," President Barack Obama said Thursday during an interview on a nationally syndicated radio show. "It's getting fixed."
The program has taken polluting cars off the road and stimulated the economy, administration officials say.
"This program has been a lifeline to the automobile industry, jump-starting a major sector of the economy and putting people back to work," said Transportation Secretary Ray LaHood. "At the same time, we've been able to take old, polluting cars off the road and help consumers purchase fuel-efficient vehicles."
The Commerce Department reported this month that manufacturing output was up in July - for the first time in months - and attributed the uptick during a recession to the vehicles being sold under the clunkers trade-in program.
Rep. Edward J. Markey, a Massachusetts Democrat and one of the authors of the legislation creating the program, said, "Cash for clunkers shows that smart government policies actually can save oil and money. Instead of America striking bad deals with OPEC oil cartels, American consumers have struck good deals in showrooms for fuel-efficient cars."
The program will be shut down as of 8 p.m. Monday.
All valid transactions under the federal trade-in program must be submitted before then, officials said, so the Department of Transportation is advising consumers and dealers to agree only to deals in which all of the necessary paperwork has been reviewed and approved.
There is "no plan to seek additional funding," an Obama administration official said, speaking on condition of anonymity.
By the numbers
450,000 transactions : have been submitted by dealers, through early Thursday
$1.9 billion: has been requested for reimbursement by dealers
150,000 applications : have been reviewed by the Department of Transportation
$140 million in payments : have been approved
Source: Associated Press