Iowa Senator Tom Harkin proposes setting income limits on the popular Cash for Clunkers program which, if his amendment passes, could stop the program dead in its tracks by tomorrow as it’ll run out of financial fuel. Harkin, a Democrat, says he’s "duty-bound and conscience-bound" to introduce the amendment that would put a cap on who would qualify for the rebates — and who wouldn’t qualify.
"Under the present Cash for Clunkers program, someone making $400,000 a year can get $4500 to buy a car," Harkin says. "Someone making $2-million a year can get $4500 to buy a car. That doesn’t seem to make sense to me." He says someone like Microsoft boss Bill Gates should not be able to qualify for the government cash.
The program was designed to encourage people with gas-burning older cars to trade them in for more fuel-efficient new models, but the Obama administration says the program will go broke by Friday. The U.S. Senate today is expected to vote on a two-billion dollar injection of funds. Harkin says with his income cap in place, the money being devoted to Cash for Clunkers will be able to go farther.
"An individual with income below $50,000 or a family with income below $75,000 a year would be the ones who would get the money," Harkin says. "If you limit it to that, if you put those caps on it, you could give them more money to buy a new car and these are the people who are really stressed out."
He says the moderate-income earners may not have the cash to buy a new vehicle otherwise and are more likely to be driving around in a gas guzzler. The Senate needs to pass the House version of the bill if the president is to sign it right away. If Harkin’s amendment passes, he fully realizes the bill would be kicked back to the House for another vote, but the House is already in recess.
"Even if it delays the program, that would not be a tragedy," Harkin says. "There are many reports of dealers who’ve developed a shortage of certain well-selling cars under the program but there are still plenty of other cars out there." Harkin says he’s seen reports that four out of five cars being sold under the Cash for Clunkers program are foreign-made, so he says there should be an abundance of American-made vehicles that are fuel-efficient and ready for sale.
Harkin says he’s not concerned that his amendment’s passage might mean the program will run out of gas, at least temporarily. "I just don’t buy that idea that we’ve gotta’ rush to judgment here," Harkin says. "Last time I was rushed to judgment on something like this was last year on that TARP program and I’m not going to get rushed into this ‘sky-is-falling’ scenario again. Not again. I’m not going to get rushed into it. Just because the House passed it and they went home, therefore, we can’t change it? Nonsense."
Harkin says he does not anticipate his amendment will get sufficient votes to pass. He says most Democrats want to simply pass the House version and move on, and he adds, "I don’t think the Republicans will vote for it because they just like the rich people to get their money."