WASHINGTON, D.C. – U.S. Senate Republican Whip Jon Kyl today introduced a measure that would suspend additional funding for the “Cash for Clunkers” program so that tracking mechanisms could be put into place to determine how much money is actually being spent.
The measure would require the Department of Transportation to clear out all of the pending transactions and maintain a database to ensure that the federal government does not obligate more money than it has available to reimburse dealers. It would also prohibit any additional funds for the program until DOT submits a report to Congress evaluating the methodology used to compare daily obligations made under the program to the actual reimbursements sent to the dealers and reviews the fuel efficiency standards of the program.
“Although the program is well-intentioned, many have criticized its efficiency and questioned the ability of the Department of Transportation to manage its application,” said Kyl. “Cash for Clunkers has only been running for a couple of weeks, but DOT is already saying the $1 billion appropriated for the program has likely been spent. Now it is asking for an additional $2 billion to keep the buying frenzy going. Before we spend $2 billion more, Congress must know how much is already obligated and make sure we can track any future spending. Otherwise, there could be more deals made than there is money available.”
Less than one week after the inception of the program, DOT communicated to Congress that the program had been suspended because the funding was exhausted. The following day, DOT said the program was not suspended and transactions could continue.
On Sunday, August 2, Transportation Secretary Ray LaHood was on C-SPAN’s “Newsmakers” and first stated that the entire $1 billion hadn’t been spent. However, later in the interview Secretary LaHood said that the administration would only honor deals made through Tuesday unless the Senate approves additional funding for the program. He then said, in the same interview, that DOT estimates there is enough money to cover deals made through this week.
There have also been multiple complaints from dealers who have had trouble with the program. Some dealers haven’t received their registration information and some have had trouble accessing the system to submit transactions successfully. DOT presumably does not have an accurate count of how many transactions have been made compared to how much money is left in the Cash for Clunkers program.
The measure was introduced as an amendment to HR 3435, the Cash for Clunkers bill.
