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Car Allowance Rebate System
The Car Allowance Rebate System (CARS), colloquially known as "cash for clunkers", was a $3 billion U.S. federal scrappage program intended to provide economic incentives to U.S. residents to purchase a new, more fuel-efficient vehicle when trading in a less fuel-efficient vehicle. The program was promoted as a post-recession stimulus program to boost auto sales (which had declined due to the 2008 financial crisis, the Great Recession, and the 2008–2010 automotive industry crisis) while putting more fuel-efficient vehicles on the roadways.
The program officially started on July 1, 2009, the processing of claims began July 24, and the program ended on August 24, 2009, as the appropriated funds were exhausted, having scrapped 677,081 vehicles. The deadline for dealers to submit applications was August 25. According to estimates of the Department of Transportation, the initial $1 billion appropriated for the system was exhausted by July 30, 2009, well before the anticipated end date of November 1, 2009, due to very high demand. In response, Congress approved an additional $2 billion.
Economist Alan Blinder helped popularize the idea of a scrappage program and the moniker "cash for clunkers" with his July 2008 op-ed piece in The New York Times. Blinder argued that a cash-for-clunkers program would have a three-pronged purpose of helping the environment, stimulating the economy, and reducing economic inequality.
Jack Hidary of Smart Transportation and Bracken Hendricks of the Center for American Progress co-wrote a paper that was distributed to congressional offices in November 2008 describing the multiple benefits of a cash-for-clunkers program.
The House approved creating a cash-for-clunkers program with the 298 to 119 passage of the CARS Act ("Consumer Assistance to Recycle and Save Act", H.R. 1550). The House bill, sponsored by Rep. Betty Sutton (D-Ohio), allowed consumers to trade-in vehicles with a combined fuel economy of 18 mpg‑US (13 L/100 km; 22 mpg‑imp) or less for new, more efficient vehicles. In the Senate, Debbie Stabenow (D-Michigan), and Sam Brownback (R-Kansas) sponsored a bill very similar to the House's.
An alternative bill proposed by Dianne Feinstein (D-California), Susan Collins (R-Maine), and Chuck Schumer (D-New York) would have had a greater focus on increasing fuel economy. Proponents argued that the alternative bill would lead to 32% more efficiency improvements than the House-Stabenow-Brownback version of the program. The alternative bill would have required that the trade-in vehicle have a fuel economy rating of 17 mpg‑US (14 L/100 km; 20 mpg‑imp) or less and offered a three-tiered voucher system ranging from $2,500 for a new car that is 7 mpg‑US (8.4 mpg‑imp) more efficient than a trade-in to $4,500 for one that is 13 mpg‑US (16 mpg‑imp) more efficient. Mileage improvement requirements would be less for light and heavy-duty trucks. Pre-1999 work trucks would be eligible for the $2,500 voucher regardless of mileage improvements. The alternative bill also gave a $1,000 voucher for the purchase of a more efficient used car; the House bill completely excluded used vehicles.
In the Senate, the cash-for-clunkers legislation was inserted into a larger war supplemental funding bill. Dissenting Senators raised a point of order under Rule 28, prohibiting inserting provisions not previously passed by either house into conference reports. The rule was overridden with 60 votes, despite some senators, including Sam Brownback, being uncomfortable with a last-minute change that called for the bill's funding to come from "deficit spending" rather than from the stimulus package that was initially agreed upon. The larger funding bill passed by a vote of 91–5 in the Senate.
The Supplemental Appropriations Act, 2009 was signed into law with the Consumer Assistance to Recycle and Save Program (C.A.R.S.) as Title XIII. The program received an initial allocation of $1 billion (out of the $4 billion estimated cost) funded by the U.S. government and the program's length was July 1 – November 1. It was implemented by the National Highway Traffic Safety Administration (NHTSA), which had 30 days from the approval of the bill to post all program details online.
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Car Allowance Rebate System
The Car Allowance Rebate System (CARS), colloquially known as "cash for clunkers", was a $3 billion U.S. federal scrappage program intended to provide economic incentives to U.S. residents to purchase a new, more fuel-efficient vehicle when trading in a less fuel-efficient vehicle. The program was promoted as a post-recession stimulus program to boost auto sales (which had declined due to the 2008 financial crisis, the Great Recession, and the 2008–2010 automotive industry crisis) while putting more fuel-efficient vehicles on the roadways.
The program officially started on July 1, 2009, the processing of claims began July 24, and the program ended on August 24, 2009, as the appropriated funds were exhausted, having scrapped 677,081 vehicles. The deadline for dealers to submit applications was August 25. According to estimates of the Department of Transportation, the initial $1 billion appropriated for the system was exhausted by July 30, 2009, well before the anticipated end date of November 1, 2009, due to very high demand. In response, Congress approved an additional $2 billion.
Economist Alan Blinder helped popularize the idea of a scrappage program and the moniker "cash for clunkers" with his July 2008 op-ed piece in The New York Times. Blinder argued that a cash-for-clunkers program would have a three-pronged purpose of helping the environment, stimulating the economy, and reducing economic inequality.
Jack Hidary of Smart Transportation and Bracken Hendricks of the Center for American Progress co-wrote a paper that was distributed to congressional offices in November 2008 describing the multiple benefits of a cash-for-clunkers program.
The House approved creating a cash-for-clunkers program with the 298 to 119 passage of the CARS Act ("Consumer Assistance to Recycle and Save Act", H.R. 1550). The House bill, sponsored by Rep. Betty Sutton (D-Ohio), allowed consumers to trade-in vehicles with a combined fuel economy of 18 mpg‑US (13 L/100 km; 22 mpg‑imp) or less for new, more efficient vehicles. In the Senate, Debbie Stabenow (D-Michigan), and Sam Brownback (R-Kansas) sponsored a bill very similar to the House's.
An alternative bill proposed by Dianne Feinstein (D-California), Susan Collins (R-Maine), and Chuck Schumer (D-New York) would have had a greater focus on increasing fuel economy. Proponents argued that the alternative bill would lead to 32% more efficiency improvements than the House-Stabenow-Brownback version of the program. The alternative bill would have required that the trade-in vehicle have a fuel economy rating of 17 mpg‑US (14 L/100 km; 20 mpg‑imp) or less and offered a three-tiered voucher system ranging from $2,500 for a new car that is 7 mpg‑US (8.4 mpg‑imp) more efficient than a trade-in to $4,500 for one that is 13 mpg‑US (16 mpg‑imp) more efficient. Mileage improvement requirements would be less for light and heavy-duty trucks. Pre-1999 work trucks would be eligible for the $2,500 voucher regardless of mileage improvements. The alternative bill also gave a $1,000 voucher for the purchase of a more efficient used car; the House bill completely excluded used vehicles.
In the Senate, the cash-for-clunkers legislation was inserted into a larger war supplemental funding bill. Dissenting Senators raised a point of order under Rule 28, prohibiting inserting provisions not previously passed by either house into conference reports. The rule was overridden with 60 votes, despite some senators, including Sam Brownback, being uncomfortable with a last-minute change that called for the bill's funding to come from "deficit spending" rather than from the stimulus package that was initially agreed upon. The larger funding bill passed by a vote of 91–5 in the Senate.
The Supplemental Appropriations Act, 2009 was signed into law with the Consumer Assistance to Recycle and Save Program (C.A.R.S.) as Title XIII. The program received an initial allocation of $1 billion (out of the $4 billion estimated cost) funded by the U.S. government and the program's length was July 1 – November 1. It was implemented by the National Highway Traffic Safety Administration (NHTSA), which had 30 days from the approval of the bill to post all program details online.