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CONGRESS OKS 'CASH FOR NEW LIMOS'- WILL LINCOLNS SAVE GAS?

CONGRESS OKS 'CASH FOR NEW LIMOS'- WILL LINCOLNS SAVE GAS?

Detroit News * June 19, 2009

WASHINGTON, DC -- Last-minute intervention from the White House on Thursday swayed a crucial Democratic senator to rescue a $1 billion "cash for clunkers" plan to boost battered auto sales.

The legislation will provide credits of $3,500 or $4,500 for consumers to buy new cars. The requirements: An old car rated at 18 miles per gallon or less in combined city and highway mileage, traded for a new car, foreign or domestic, that gets at least 4 mpg higher. For small trucks, the new vehicle must be rated at 18 mpg or greater and at least 2 mpg higher than the trade-in. Heavier trucks and work vehicles have separate requirements.

Sixty senators, the bare minimum needed, voted to reject an attempt to strip the program from a wartime spending bill. The key vote was Sen. Maria Cantwell, D-Wash., who switched to vote in favor of the measure after what her office said were assurances from President Barack Obama that he would work to put more fuel-efficient cars on the road.

The "cash for clunkers" program will boost U.S. car sales, which are expected to fall to between 9 million and 10 million units this year from 13.2 million in 2008, according to Edmunds.com, an online consumer guide.

The full bill, including money to support the war effort, cleared the Senate on a 91-5 vote and was sent to the White House for Obama's signature, likely next week.

The program, which is expected to go into effect in late July or early August, would give consumers cash incentives to trade in gas guzzlers for new models with higher fuel efficiency.

Sen. Debbie Stabenow, D-Lansing, said Vice President Joe Biden helped her lobby wavering members. The White House declined to comment on the administration's efforts, but they appeared to have helped keep much-needed Democratic votes.

Only one Democrat, Ben Nelson of Nebraska, voted to remove the car purchase provision from the bill; Democrats including Diane Feinstein of California, who had criticized the language as failing to boost fuel efficiency enough, supported it.

"This is a real important shot in the arm to boost auto sales," said Stabenow, the lead Senate sponsor of the legislation. She and other supporters have argued that the measure will help car sales rebound, and boost the fuel efficiency of the nation's auto fleet. Demand for new cars and trucks has slumped 36 percent this year, with General Motors Corp. and Chrysler Group LLC posting greater sales declines.

Officials from Ford Motor Co., Mazda Motor Co., and trade groups for dealers and international automakers all welcomed the vote. The program "will boost consumer confidence, get the economy going again and reduce our dependence on foreign oil," said John McEleney, president of the National Auto Dealers Association.

The House had twice voted to approve the measure, first as a stand-alone bill, then as part of a $106 billion wartime spending bill.

But there was opposition in the Senate, first from Feinstein and others who sought tougher fuel-efficiency rules, then from Sen. Judd Gregg, R-N.H., a fiscal conservative who didn't take issue with the concept but rather the lack of a mechanism to pay for it.

"It's a billion dollars of new costs put on our children's shoulders," Gregg said. He used a relatively obscure Senate rule to try to remove the "cash for clunkers" language from the bill.

Had he succeeded, Stabenow said, the proposal would have died. Bringing it up as a stand-alone bill would have allowed senators trying to block the government-financed restructuring of GM and Chrysler to bring those measures up as amendments. "We couldn't risk it," she said.

Senate Majority Leader Harry Reid, D-Nev., spoke shortly before the vote, warning Republicans that they risked more than $80 billion in funding for wars in Iraq and Afghanistan if they removed the "cash for clunkers" measure. He said there was no guarantee the House, which narrowly approved the war spending on Tuesday, could muster enough votes a second time.

Gregg scoffed at that notion, and said stripping the funding would send a powerful message that the Senate was serious about addressing the fast-growing national debt.

Just four Republicans voted with 56 Democrats to maintain the program: Kit Bond of Missouri and George Voinovich of Ohio, both regular allies of the auto industry; Thad Cochran of Mississippi, the top Republican on the Senate Appropriations Committee; and Susan Collins of Maine, one of the Senate GOP's most moderate members.

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