There have been a couple of diaries on what will probably be a big story tomorrow: The government suspending the "Cash for Clunkers" progam. This progam is an absolute success. The way the "suspension" has been couched by the AP and Politico also makes it one of the most dishonest attacks I've ever seen.
The "Car Allowance Rebate System" (CARS), was a touted part of the stimulus. One billion was allocated for the progam. I won't go into the details much (they are well known), but up to $4500 was allocated per car to get people into a newer, fuel-efficient vehicle. There are a number of restrictions on the cars turned in (Registered and insured for at least one year, among them), but the goal was to both spur car sales, as well as get folks out of crappy old cars.
Well, it looks like the program has been an OVERWHELMING success. Since the program began in earnest this week, over 22,000 cars have already been sold. Dealers across the country have their showrooms filled to the brim with potential customers. The program is such a success that unfortunately, the progam looks to run out of money very soon.
Through late Wednesday, 22,782 vehicles had been purchased through the program and nearly $96 million had been spent. But dealers raised concerns about large backlogs in the processing of the deals in the government system, prompting the suspension.
A survey of 2,000 dealers by the National Automobile Dealers Association found about 25,000 deals had not yet approved by NHTSA, or nearly 13 trades per store. It raised concerns that with about 23,000 dealers taking part in the program, auto dealers may already have surpassed the 250,000 vehicle sales funded by the $1 billion program.
"There's a significant backlog of 'cash for clunkers' deals that make us question how much funding is still available in the program," said Bailey Wood, a spokesman for the dealers association.
Well, this sounds like a GREAT problem to have, right? By my math, $1,000,000,000/$4500=222,000 cars sold, and 222,000 crappy cars off the road. Obviously, these numbers will be different because some folks aren't getting the full $4500 rebate, but for the purposes of my argument, that's over 200k new cars (likely pushing 250k) being bought. That is commissions for salesman, money for suppliers and the like, and additional credit flowing. How can that be anything other than a success?
Well, if you're the Politico or the AP, you find a way.
Ah, yes, the poor old, incompetent Obama Administration. Can't even run a simple program, right? And here comes a GOP rep to blast them:
One Michigan Republican, Congresswoman Candice Miller, has already come out in favor of extending the program, saying in a statement: "There can be no doubt that the Cash for Clunkers program is a complete success given the fact that the entire $1 billion allocated to the program was expended in less than a week."
She called the program "simply the most stimulative $1 billion the federal government has spent during the entire economic downturn."
Wait, what? A GOP rep praising the program (albeit one from Michigan)? What the deuce? Well, I bet we can find one who will rip it:
And Sens. Dianne Feinstein (D-Calif.) and Susan Collins (R-Maine) seized on the news to push for their more ambitious proposal, which would also expand the program to used-car sales so that "lower-income consumers" could also participate.
"We believe that any extension of the 'Cash for Clunkers' program must go further in advancing the goals of better fuel efficiency and greater emissions reductions. We will not support any bill that does not meet these goals," they said in a statement.
So despite the overwhelming success and bipartisan kudos, the AP and Politico decide to couch it as incompetence by the Administration. Kudos to you, Politico and AP. Finally, I agree with Senator Feinstein that the program should be extended to get lower-income people involved with some sort of used car progam. This program is a big success, so let's keep it going!
Update-Looks like the AP has rewitten their story:
The White House said Thursday it was reviewing what has turned out to be a wildly popular "cash for clunkers" program amid concerns the $1 billion budget for rebates for new auto purchases may have been exhausted in only a week.
Transportation Department officials called lawmakers' offices earlier Thursday to alert them of plans to suspend the program as early as Friday. But a White House official said later the program had not been suspended and officials there were assessing their options.
"We are working tonight to assess the situation facing what is obviously an incredibly popular program," White House press secretary Robert Gibbs said of the Car Allowance Rebate System. "Auto dealers and consumers should have confidence that all valid CARS transactions that have taken place to date will be honored."
Gibbs said the administration was "evaluating all options" to keep the program funded.
As I said in a comment below, there is zero chance this progam will be ended. The overwhelming success guaranteed that, as well as the fact that even GOPers are jumping on board. I predict this will be a big story going forward.