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'Cash for Clunkers' Bill Drives Some Senators Mad

A "cash for clunkers" bill that would allow motorists to trade in their gas-guzzling cars and trucks for vouchers worth up to $4,500 toward more fuel-efficient vehicles is sending two senators into overdrive.

The one-year program is aimed at boosting new auto sales and increasing the fleet of fuel-efficient vehicles on the nation's highways. 

President Obama has urged Congress to approve consumer incentives for new car purchases as part of the government's work to restructure General Motors and Chrysler. On Tuesday, the House approved its version 298-119 and now the legislation is pending in the Senate.

But Sens. Dianne Feinstein, D-Calif., and Susan Collins, R-Maine, slammed the House bill Thursday in an opinion article published in the Wall Street Journal, claiming that Detroit auto industry lobbyists have jacked the proposal and turned it into "another big bailout" for gas guzzlers.

"The bill being pushed by the auto industry is simply bad policy," they wrote, arguing that the bill encourages the purchase of inefficient vehicles and undercuts legislation passed in 2007 that mandates at least a 10 miles-per-gallon increase in average fuel economy standards over the next 10 years.

"And yet less than two years after passing this landmark bill we are weighing legislation that would create handouts for Hummers."

The two complained that the House bill would qualify vehicles like the 2009 Hummer H3T, which averages 16 mpg, and the 2009 Dodge Ram 1500 4x4 truck, which averages 15 mpg. Excluded from the House bill would be a two-year-old Ford Focus, which averages 27 mpg or a used Chevy Colorado, which averages 20 mpg.

Chief sponsor of the House bill, Rep. Betty Sutton, D-Ohio, did not provide immediate comment. Neither did Sen. Debbie Stabenow, D-Mich., who has backed a similar version in the Senate.

Feinstein and Collins are leading a group of senators who is pushing an alternative version that would require consumers to trade up for more fuel-efficient cars and trucks to qualify. The other senators are Chuck Schumer, D-N.Y., and Tom Carper, D-Del.

They claim their plan would achieve 32 percent more oil savings, save drivers 176 gallons of gasoline per year and cut greenhouse gas emissions by 32 percent more than the industry-backed proposal.

Under their plan, a passenger car owner's trade-in would need to get 17 mpg or less to qualify and only new passenger cars getting at least 24 mpg would be eligible. Owners could receive a $2,500 voucher for a new car that gets at least 7 mpg more than their old car. The voucher would increase to $3,500 for new cars with a 10 mpg improvement and $4,500 for new cars with a 13 mpg increase in fuel efficiency.

"Our goal all along has been to advance legislation that can improve the environment and stimulate the auto industry at the same time," Schumer said. "This smart proposal accomplishes both goals."

Carper called the plan a "win-win proposal."

Under the House bill, motorists could get a voucher worth $3,500 if they traded in a vehicle getting 18 miles per gallon or less for one getting at least 22 miles per gallon. The value of the voucher would grow to $4,500 if the mileage of the new car is 10 mpg higher than the old vehicle. The miles per gallon figures are listed on the window sticker.

Owners of sport utility vehicles, pickup trucks or minivans that get 18 mpg or less could receive a voucher for $3,500 if their new truck or SUV is at least 2 mpg higher than their old vehicle. The voucher would increase to $4,500 if the mileage of the new truck or SUV is at least 5 mpg higher than the older vehicle. Consumers could also receive vouchers for leased vehicles.

In their Wall Street Journal article, Feinstein and Collins say the industry-backed proposal falls short of their vision.

"The truth is, the House bill and its Senate counterpart are another big bailout," they wrote. "These bills are expertly designed to provide Detroit one last windfall in selling off gas guzzlers currently sitting on dealer lots because they're not a smart buy."

Sen. Sam Brownback of Kansas, who was the chief Republican sponsor of Stabenow's version of the bill, said he can no longer support the "clunkers" program because the House has decided to fund the legislation through deficit spending and attach it to a war spending bill.

"I will not support the plan if it creates new spending and increases the deficit to do it," he said in a statement Thursday. "I cannot understand why House leadership can't find a way to use any of the $455 billion left in stimulus funds to pay for the program."

Click here to read The Wall Street Journal op-ed.

The Associated Press contributed to this report.