House OKs $2 billion more for Clunker program
House passes bill to add $2 billion for Cash for Clunkers program.
NEW YORK (CNNMoney.com) -- The House on Friday passed a bill to allocate another $2 billion to the Cash for Clunkers program.
The move came after reports on Thursday had raised concerns that the program was out of money.
The bill which diverts $2 billion from a U.S. Department of Energy program loan guarantee program, passed 316-109. The bill will face tough opposition in the Senate, which is expected to take up the issue next week.
"I'm pleased about the progress made in the House today about the cash for clunkers program," said President Obama, in a speech immediately following the vote.
The fate of the $1 billion trade-in program was thrown into question Thursday over concerns that it may have already burned through its funds less than a week after it was officially launched.
It was unclear how much longer car buyers would be able to trade in clunkers after reports surfaced on Thursday night that the program would be suspended.
Obama, in his Friday speech, presented the program as a success: "I'm happy to report that it has already succeeded beyond our expectations. It's working so well that there are legitimate concerns that the original funds might already be exhausted."
One of the Clunker program's main champions in Congress, Sen. Debbie Stabenow, D-Mich., said the incentive has provided an important boost to the economy and resulted in 200,000 car sales.
"I am delighted to hear dealers say that all of their salespeople are busy and they are selling more cars in a day than they had been selling in a month," Stabenow said.
Cash for Clunkers, which Congress passed in June, was set to end on Nov. 1 or whenever its $1 billion budget was depleted.
An earlier version of the Clunkers proposal called for appropriating $4 billion.
On Friday morning, the government's official CARS.gov Web site, set up to provide dealers and consumers with information about the plan, still showed $780 million remaining in the coffers.
But many dealers say they are still waiting to proceed.
Under the plan as enacted, vehicles purchased after July 1 will be eligible for refund vouchers worth $3,500 to $4,500 on traded-in gas guzzlers. The trade-in vehicle has to get combined city and highway fuel economy ratings of 18 miles per gallon or less.
The program aims at helping the struggling auto industry by taking inefficient cars off the road and spurring new sales.
Domestic auto sales have been hit hard by the recession and credit crunch and helped propel the bankruptcies and government bailouts of General Motors and Chrysler. In June, the seasonally adjusted annual sales rate fell to 9.7 million, a pace well below recent years.