The Cash for Clunkers program is once again drawing the curiosity of U.S. Sen. Chuck Grassley, R-Iowa.
In a second letter to the U.S. Department of Transportation, Grassley expressed doubts that the program created as many jobs as the Obama administration says.
He also questioned the administration’s claim that 667,000 vehicle purchases were facilitated by the program.
U.S. Rep. Bruce Braley, D-Iowa, defended the initiative Friday, citing a new study that says the bulk of the purchases made through the program wouldn’t have happened without it.
The $3 billion Car Allowance Rebate System program, better known as Cash for Clunkers, was aimed at spurring new car sales and taking older, less-fuel-efficient cars — clunkers — off the road.
The program, which gave car buyers rebates of up to $4,500, generated significant publicity last summer.
Grassley began asking questions in January, questioning how the program was administered.
Early on, there were reports by dealers of numerous difficulties processing deals.
Also, with so much government money being spent so quickly, Grassley said, oversight was needed.
In his latest letter, sent Thursday, Grassley questioned the administration’s claims that it saved or created 60,000 jobs.
Grassley said taking tax money or acquiring debt to pay for the program likely offset the impact.
“The net effect on an economy wide basis is likely to be zero at best,” he said.
He also cited an Edmunds.com study that said 125,000 of the Cash for Clunkers sales wouldn’t have occurred without the program.
Braley, a co-sponsor of the House bill creating the program, responded that it has proven itself “enormously successful.”
He cited a study, released earlier in the week by Maritz Automotive Research, which said 542,000 of the 667,000 sales were incremental, meaning they wouldn’t have occurred otherwise.
The study surveyed nearly 36,000 people who bought a vehicle under the program.
Braley added that previous studies and testimony have pointed to environmental and economic benefits. He said congressional testimony has even shown it took less-safe vehicles off the road, providing benefits in that area.
“It think it has been wildly successful and will stand up to long-term scrutiny,” Braley said.
The debate over the Cash for Clunkers program is not academic.
It served as a model for a similar program for appliances, and backers of the approach have said it could be used as a model for future programs.









