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Editorial: ‘Clunker’ program may need a tune-up

Sun., Aug. 2, 2009

When Congress adopted the “cash for clunkers” program, it was supposed to be evaluated for possible improvements after the first $1 billion was spent. Should the rules be changed? Is the process too cumbersome? Was it worth the expenditure?

This discussion was to begin on Nov. 1, but the program burned through the money three months early. Obviously, the program is more popular than Congress imagined, but it’s still worth asking whether it ought to be continued or tweaked. Dealers are already complaining of long delays in getting vouchers approved.

As news of the program running out of money began to spread, so did the panic among politicians. President Barack Obama urged a quick infusion of cash. The U.S. House on Friday quickly agreed, passing a bill that would spend another $2 billion. The Senate must now consider whether this ought to be approved without further evaluation.

The answer is no. There’s no need to rush.

At the outset, the program was slipped into a defense appropriations bill. There wasn’t much opportunity to debate its merits. If Congress agrees to this accelerated spending, then it will have missed another chance to have a thoughtful debate.

To recap, the program works like this: A vehicle younger than 25 years old can be traded in for a $3,500 or $4,500 voucher toward a new vehicle as long as the new vehicle gets better gas mileage. The dealer must junk the old car. The size of the voucher is determined by the improvement in fuel mileage. If the new car gets at least 10 more miles per gallon, it qualifies for a $4,500 credit. If the improvement is between 4 and 10 mpg, that deal fetches a $3,500 discount. For trading in a sport utility vehicle, minivan or smaller truck, the difference only has to be 2 mpg.

Congress ought to widen the fuel mileage gap between old and new vehicles to gain more environmental benefits. It ought to also allow the sale of late-model used cars, as long as they meet the mileage requirements. The nation benefits more from the purchase of a used hybrid or compact car than a new SUV, but only the latter qualifies. Opening it up to used cars would also allow more lower-income people to participate.

Perhaps the fuel mileage gap between new cars and clunkers is already wide enough that changes in the law aren’t needed. But there’s no way to know without taking the time to study which cars are being sold and which ones are being junked.

Congress ought to hit the brakes and check under the hood. If the program can be improved, do so. If it’s not worth it, then junk it.