If the U.S. House of Representatives has its way, American car buyers could soon receive vouchers of up to $4,500 to trade in their aging and inefficient vehicles on more fuel-stingy cars and trucks.
The House, encouraged by White House support, approved a so-called “cash-for-clunkers” measure by 298-119, despite some Republican opposition. The proposal, which sponsors believe could generate as many as 1 million additional sales for an industry suffering from a 47% decline in volume, still must be approved by the Senate, where it is hung up, and then go to the White House, where President Barack Obama is considered all but certain to sign it into law.
“Stimulating sales is the only way to get the auto industry back on its feet,” said Republican Rep. Donald Manzullo, one of those who voted his approval. But Republican Jeff Flake countered that the measure is “defying the laws of economics and saying we can manufacture enough of a demand to keep the auto industry afloat.”
Proponents can point to Europe, where several recent cash-for-clunkers deals have shown great promise in promoting car sales. In Great Britain, a similar measure generated 35,000 sales since it was launched, barely a month ago, according to data from the British government. (more…)