Have you heard about the ‘Cash For Clunkers‘ program yet? This bill is supposed to give you a $4500.00 voucher towards buying a new and more fuel efficient car.

Too bad it doesn’t apply to buying a more fuel efficient USED car.

After reading an article (below) about the Cash For Clunker program, it brings up a whole bunch of questions, like…

What limitations will there be on the kind of car you can turn in?

What is to keep someone from buying an old clunker from a junk yard and turning that in to get the $4500.00 credit towards buying a new car?

Will that create a boom in the junked car industry?

And what will be the long term consequences to the taxpayers for this artificial stimulation to the economy?

Here is an article from the New York Times about the Cash For Clunkers program…

May 6, 2009, 9:18 am
Congress Close on ‘Cash for Clunkers’
By Ken Belson

After months of debate, Congress appears close to reaching a compromise “Cash for Clunkers” plan that would give consumers up to $4,500 if they turn in their old car and use the money to buy a new, more fuel-efficient replacement.

Late Tuesday, the House Committee on Energy and Commerce released a fact sheet that outlines the plan, which includes elements of two competing bills in the House and another in the Senate.

Under the plan, consumers can turn in cars or light-duty trucks that get less than 18 miles a gallon. If they buy cars that have “window sticker” mileage ratings of at least four miles a gallon more than their old cars, they will receive a voucher worth $3,500. If they buy cars that get at least 10 miles a gallon more than their old car, they receive $4,500. (Readers can check the “window sticker” mileage ratings of cars going back to 1985 at fueleconomy.gov.)

They can get vouchers for turning in light-duty trucks, large light-duty trucks and work trucks as well.

The fact sheet did not say how much the government would commit for the program, which would run only for a year. Yet Congressional Democrats expect about 1 million older cars to be taken off the road, an ambitious number considering that fewer than 100,000 cars have been scrapped in California and Texas, where programs have been in place for several years.

The Senate must still iron out its differences. The president has said he supports a clunkers plan.

But the plan announced on Tuesday was missing key elements of the competing bills in the House that will alter which cars consumers can buy with their vouchers.

The top amount available on the vouchers was lowered from $5,500 to $4,500, which could force consumers to buy more modest cars.

A bill sponsored by Rep. Betty Sutton, Democrat of Ohio, also required that any car purchased with vouchers be assembled in North America. That provision appears to have been dropped, which means imported vehicles could be bought as well.

Another bill sponsored by Rep. Steve Israel, Democrat of New York, and nine other representatives, would have let consumers buy used cars. That clause appears to also have been dropped.

Most noticeably, the mileage ratings of the new cars that consumers buy have been significantly watered down. Under the Israel plan, cars bought with vouchers would have to get 25 percent more than the average combined mileage rating of cars in its class. The Sutton plan said cars had to get at least 27 miles a gallon.

In the compromise plan, cars would have to have a combined fuel rating of 22 miles a gallon. This troubled Mr. Israel, whose plan was endorsed by environmental groups.

“When I first introduced H.R. 520, the Accelerated Retirement of Inefficient Vehicles Act, my idea was to take a giant leap forward in efficiency by asking American drivers to go above and beyond C.A.F.E. standards,” he said in a statement. “Although I wish the compromise had done more to increase efficiency, this program is a step in the right direction.”

The American Council for an Energy-Efficient Economy, a nonprofit group, issued a press release this morning saying the plan’s fuel standards were too low.

“Federal incentives should promote vehicles with above-average fuel economy, at a minimum, so that American consumers are better prepared for the higher gasoline prices that are likely to return once the current recession ends,” said Steven Nadel, the group’s executive director. “We encourage the full House and the Senate to tighten up the criteria for this program so as to further U.S. energy goals while helping to stimulate auto sales.”

Still, the domestic auto industry appears eager for any plan that puts money in consumers’ hands and leads them to buy new cars.

“Scrappage programs implemented in other countries around the world have proven to be very successful in reinvigorating car and truck sales,” General Motors said in a statement. “The approach of providing vouchers for new vehicle purchases, which is tied to getting older, less efficient vehicles off the road at the same time is a huge win for consumers, the economy and the environment.”