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House Energy and Commerce Committee Accepts Cash for Clunkers Program

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The
U.S. House of Representatives Committee on Energy and Commerce has
accepted the "Cash for Clunkers" fleet modernization amendment into the
language of House Bill 2454, the American Clean Energy and Security Act
of 2009, by a vote of 50-4. The amendment’s goal is to replace older,
less-fuel-efficient vehicles with new, more-fuel-efficient vehicles –
thus spurring new car sales in the United States.

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This new provision states that consumers may receive vouchers worth up
to $4,500 to help pay for new, more-fuel-efficient cars with a goal of
selling 1 million cars in one year. Specifically, the text states:

 • The old vehicle must get less than 18 miles per gallon (mpg).

 • New passenger cars with mileage of at least 22 mpg are eligible for vouchers.

 • If the mileage of the new car is at least 4 mpg higher than the old vehicle, the voucher will be worth $3,500.

 • If the mileage of the new car is at least 10 mpg higher than the old vehicle, the voucher will be worth $4,500.

 

The Automotive Service Association (ASA) noted that a repair option was
excluded from the language of the bill. ASA said it supports a "Cash
for Clunkers" program with a repair option, specifically with these key
points:

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 • Includes a vehicle repair option for consumers.

 • Programs 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.

The amendment that was accepted by the Committee excludes a vehicle
repair option, which could be devastating to independent repairers,
according to Bob Redding Jr., ASA’s Washington, D.C., representative.

“Arbitrarily removing older vehicles from America’s highways would take
vehicles out of independent repair bays, costing jobs and potentially
closing small businesses," said Redding. "A repair option tied to
higher-emitting vehicles is the most cost-efficient, consumer-friendly
approach to a fleet modernization program. This option will also allow
low-income vehicle owners who don’t have the resources for a new
vehicle to now have a dependable, lower emission vehicle. This
legislation has a long way to go and hopefully will improve as it moves
forward.”

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One opponent of the bill is the Automotive Aftermarket Industry
Association (AAIA), which says that “Cash for Clunkers” would increase
pollution and overload landfills.

“‘Cash for Clunkers’ is touted as protecting the environment by taking
older vehicles off the road and replacing them with new, more fuel
efficient vehicles. The reality is that these scrapped vehicles will be
heading to landfills. It’s ironic that a proposal designed to reduce
pollution will actually further damage the environment,” said Aaron
Lowe, vice president of government affairs for AAIA. “While the true
intention of this legislation is not to protect the environment but to
financially stimulate the automobile industry in the short term, the
hidden costs of this bill could cause environmental havoc
indefinitely.”

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The “Cash for Clunkers” amendment, included as part of the American
Clean Energy and Security Act of 2009 (HR 2454), states that, “For each
eligible trade-in vehicle, the title of which is transferred to a
dealer under the Program, the dealer shall certify to the Secretary, in
such a manner as the Secretary shall prescribe by rule, that the
vehicle, including the engine and drive train – i) will be crushed or
shredded within such period and in such manner as the Secretary
prescribes, or will be transferred to an entity that will ensure that
the vehicle will be crushed or shredded within such period and in such
manner as the Secretary prescribes; and ii) has not been, and will not
be, sold, leased, exchanged or otherwise disposed of for use as an
automobile in the United States or in any other country, or has been or
will be transferred, in such a manner as the Secretary prescribes, to
an entity that will ensure that the vehicle has not been, and will not
be, sold, leased, exchanged or otherwise disposed of for use as an
automobile in the United States or in any other country.”

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“Cash for Clunkers is loaded with so many potholes that the American
people will be paying a steep bill both economically and
environmentally for a long time,” continued Lowe. “In addition to the
wasteful nature of destroying perfectly good vehicles, a tremendous
amount of energy and resources will be exhausted to build new vehicles
to replace the scrapped ones. Providing incentives for motorists to
have their current vehicles maintained for fuel efficiency would be a
much better use of federal money that would truly benefit the
environment.”

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The Engine Repower Council (ERC) also issued a statement this week in
opposition of the “Cash for Clunkers” program. These programs are of
concern to the vehicle aftermarket since vehicles are scrapped that
could be more cost-effectively repaired, increasing the country’s
carbon footprint and reducing the availability of parts for rebuilders,
according to the ERC.

"Many states have attempted to implement this type of vehicle
retirement program in the past, but have abandoned the effort because
they simply don’t work," said Steve Rich, chairman of the Engine
Repower Council. "While the programs have a certain appeal to
politicians and are sold on the fact that they will get older vehicles
off the road, the fact is that these programs reduce the availability
of affordable transportation for drivers who, by taking such steps as
engine repowering, can keep a vehicle in safe, efficient working order
rather taking on the expense of a new vehicle."

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One automotive association in support of the bill is the National
Automobile Dealers Association (NADA), which said it applauds the
progress being made with the legislation.

"NADA congratulates Rep. Sutton and the House Energy and Commerce
Committee on their success in advancing a ‘Cash for Clunkers’ amendment
on the climate change bill. A successful fleet modernization program
will provide significant economic and environmental benefits to the
nation," said David Regan, NADA vice president for legislative affairs.
"NADA will now work with both House and Senate leadership to refine the
program in order to maximize consumer demand and stimulate new vehicle
sales. A ‘Cash for Clunkers’ program gets gas-guzzlers off the road and
replaces them with more fuel economical vehicles. This will help boost
auto sales which, in turn, will help revive the overall economy."

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