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Congress Discusses 'Cash for Clunkers' Program; ASA Calls for Repair Option

The 'Cash for Clunkers' policy has been discussed during testimony before the House of Representatives Committee on Financial Services, included in draft climate legislation by the House Committee on Energy and Commerce, and proposed by General Motors Corp. in its business plan submitted to Congress.

With Congress returning to Capitol Hill to consider economic stimulus legislation for the automotive industry – and returning after the holidays to discuss a broader stimulus package – the concept of a fleet modernization program is receiving more attention from policymakers. Princeton University’s Dr. Alan Blinder, in a New York Times article published earlier in 2008, referred to this policy option as “Cash for Clunkers” – government payments to remove older, less-fuel-efficient or high-polluting vehicles from America’s highways.

The “Cash for Clunkers” policy has been discussed during testimony before the House of Representatives Committee on Financial Services, included in draft climate legislation by the House Committee on Energy and Commerce, and proposed by General Motors Corp. in its business plan submitted to Congress.

In a letter to policymakers, the Automotive Service Association (ASA) indicated its support for a fleet modernization program that includes the following key points:
•    Any fleet modernization program must include a vehicle repair option for consumers.
•    The program should be administered by the states.
•    Vehicle participation should be tied to emissions and improving air quality.
•    Repair cost allowances should be sufficient to address emissions repairs.
           
Both California and Texas have state fleet modernization programs that could serve as models for other states. ASA is encouraging Congress and states to review the Texas and California programs to determine how best to structure such a program. If a new federal law is passed with funds for fleet modernization programs, states would be well-served to establish advisory committees made up of consumers, independent repairers and new car dealers to determine the most effective program, said ASA.

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