Pedal to the metal, Congress sent President Obama legislation Thursday night with an additional $2 billion for "cash for clunkers," the economy-boosting rebate program that caught the fancy of car buyers and instantly increased sales for an auto industry long mired in recession.
The Senate approved the money on a 60-37 vote after administration officials said an initial $1 billion had run out in only 10 days. The House voted last week to keep alive the program, which gives consumers up to $4,500 in federal subsidies if they trade in their cars for new, more energy-efficient models.
Without action, lawmakers risked a wave of voter discontent as they left the Capitol for a monthlong vacation.
As everyone already knows, this program allocated $1 billion and was supposed to last until November. It ran out of money in about a week. Now, the Congress has allocated twice as much to fund the program.
Now, let's think about this for a minute. The program received some media attention before it came out and within a week it was out of money. Now, it's received front page coverage for the last week. It took a week to run out of money without the free media. How long before the $2 billion runs dry? What will we do then?
This program was supposed to run until November. This money won't last until the end of the month. Will the Congress come back again in another week for more money? When will we cut this off? This latest infusion smells of short sighted nonsense. The program ran out of money in a week and so the Congress allocates twice as much just before they leave for break. What will they do in the middle of the month when this money is gone? Will we just continue to spend until November or will this program go for another two to four weeks at most?
Its entirely reasonable to believe that this latest disbursement will last longer. Its not that consumers will slow down their rate of purchasing, its that the automakers have run out of product. Focuses, Civics, Corollas, Cobalts, and Calibres inventories have been crushed by this demand combined with severe cutbacks in production capacity.
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