It’s officially known as H.R. 1550, or the CARS Act, though you might as well call it cash-for-clunkers. Whatever the name, the proposed House measure, given a boost by President Barack Obama, during his Monday speech, could help kick-start the American automotive market.
The measure is designed to provide cash incentives of up to $5,000 for those who trade in a vehicle at least eight years old on a select list of fuel-efficient products produced in North America. The legislation, as initially proposed, would offer the biggest tax credits for U.S.-made vehicles, though products made in the NAFTA countries, Canada and Mexico, would also qualify.
Similar legislation failed to catch fire, in recent months. A similar cash-for-clunkers proposal failed to make it into the final White House economic stimulus package. But with U.S. auto sales continuing to plunge, and the prospects for Detroit’s makers, in particular, worsening, there’s growing support on Capitol Hill. House Speaker Nancy Pelosi is reportedly lending her backing, and President Obama belatedly offered his own support, on Monday.