Clunkers’ $2 Billion Infusion Depends on U.S. Senate’s Vote

The future of the U.S. “cash for clunkers” program depends on the Senate backing a $2 billion infusion next week, as the Obama administration offered assurances that the discounts remain available.

“I’ll tell this to dealers: I think they can feel confident heading into the weekend with a strong bipartisan vote in the House for additional money to ensure the continuation of the program,” Robert Gibbs, the White House press secretary, said yesterday at a briefing. The Senate is likely to act by “the beginning of next week,” he said.

The House voted 316-109 yesterday for an emergency measure adding $2 billion to the program aimed at reviving U.S. auto sales, after a burst of demand exhausted most of the initial $1 billion in less than a week.

“I urge the Senate to act with the American consumers in mind to pass this important legislation,” Obama said in a statement. Senator John McCain, an Arizona Republican, indicated he may attempt to block the measure.

Named the Car Allowance Rebate System, the program provides credits of as much as $4,500 for the purchase of a new car when turning in an older vehicle to be scrapped. Lawmakers had expected the first $1 billion to generate about 250,000 vehicle sales and last until about Nov. 1.

The National Automobile Dealers Association said yesterday that its members should be cautious about signing more deals with customers under the program. Dealers provide buyers the discount they qualify for under the program and then submit paperwork for reimbursement to the federal government.

Dealers ‘Face a Risk’

“Until further definitive guidance on the availability of funding is provided by the administration, dealers who accept additional ‘clunkers’ deals may face a risk that they will not be reimbursed,” John McEleney, the association’s chairman, said yesterday in a statement.

Asked if there may be an interruption of “clunker” payments before the Senate acts, Gibbs said “we feel comfortable that there’s money to cover the transactions.” link....