Congress Ready to Pass 'Cash for Clunkers,' Despite Criticism

After bailing out banks and brokers, Congress is ready to pass out another billion dollars to those Americans who are still driving their old gas guzzlers.

Congress is expected to approve the so-called "cash for clunkers" bill this week, under which drivers can trade in their old jalopies for some of the federal government's cash. Last week, the House approved its version, 298-119.

To qualify, the trade-in vehicle must get 18 miles per gallon or less, be made between 1984 and 2001, and have been registered to the same owner for at least one year.

In return, Washington is offering $3,500 for a new car -- if it gets at least 4 miles per gallon better mileage. It'll offer $4,500 if the car gets 10 miles per gallon more or better.

Car dealers see the proposal as a win for customers stuck with old gas eaters.

"The marketplace on cars that don't get very good mileage has certainly taken a hit when gas prices go up ... so those cars are worth a little less. This is an incentive for people to get out of them and into something that is a little more fuel efficient," said car dealer Billy Rinker.

"If they have a $1,200 trade-in and the government is going to give you $4,500 for your trade-in, that is a big savings for people," said auto dealer Don Marino.

But while the bill is designed to get gas guzzlers off the road, critics say the current proposal is little more than another Detroit bailout that puts the environment second because of provisions that qualify certain trucks and SUVs.

Consumers, for instance, could buy a new Hummer under the measure and still get the subsidy -- which applies to new cars but not fuel-efficient used vehicles.

But the auto lobby says the expected sales bump is just what the industry needs to pull out of the recession.

Dave McCurdy, with the Alliance of Auto Manufacturers, said the bill could generate "anywhere from 250,000 to 300,000 vehicles in increased sales." Plus he said it would take "hundreds of millions of gallons" of gas out of the system.