Clunker Program Burns Through $1B

The Obama administration is working with Congress to find additional funding for the "cash-for-clunkers" rebate program, which has burned through its $1 billion allotment just a week after the program officially launched. 

The program gives a trade-in value of $3,500 – $4,500 for older, less fuel efficient vehicles. Initially introduced in Congress as a way to cut U.S. vehicle emissions, subsequent versions of the bill retooled it into a stimulus program for the struggling auto industry (see "Cash for Clunkers is a Clunker!). 

Administration officials initially said the program would be suspended at the end of the week, but said later Thursday that it would remain open while new funding is sought. The program was initially scheduled to run through the end of September, but consumers moved quickly to snap up more than 200,000 new vehicles, according to reports.

Senators Dianne Feinstein (D-Calif.) and Susan Collins (R-Maine) released a statement calling for a revamp of the program to allow the purchase of used vehicles and require tougher fuel-efficiency standards. The watered-down version of the bill requires the rebate to be used on the purchase of a new vehicle and only requires the new vehicle to be a few miles-per-gallon more efficient than the trade-in.

"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," the two Senators said in the statement.

According to a Los Angeles Times report, House leaders were working to bring up legislation today that would transfer an additional $2 billion into the program from economic stimulus funds. However, the timeline is incredibly tight, as House lawmakers leave for August recess today.