[Congressional Record (Bound Edition), Volume 155 (2009), Part 7]
[House]
[Pages 9143-9144]
[From the U.S. Government Publishing Office, www.gpo.gov]




          ``CARS'' BILL A PRESCRIPTION FOR IMPROVED AUTO SALES

  The SPEAKER pro tempore. The Chair recognizes the gentlewoman from 
Michigan (Mrs. Miller) for 3 minutes.
  Mrs. MILLER of Michigan. Madam Speaker, yesterday was a very, very 
tough medicine, I would say that is an understatement, tough medicine 
for the people of Michigan, as President Obama put down very quick 
timelines for General Motors and Chrysler to complete the restructuring 
plans that will make them viable both in the short term, and long-term 
viability as well.
  At that same time, the President indicated his support for the 
industry, which we took to heart, and we find that very, very 
encouraging, and the President indicated his desire to work with the 
Congress to produce an incentive to get customers in the showroom. And 
this is key: How can we incent people to actually purchase an 
automobile in these economic times?
  Madam Speaker, recently I was very proud to join with my Democratic 
colleagues, Betty Sutton of Ohio and Bruce Braley of Iowa, to sponsor 
H.R. 1550, which we call the Consumer Assistance to Recycle and Save 
Act of 2009, or the CARS Act, or as it is now commonly being referred 
to as the Cash for Clunkers bill.
  This bill, Madam Speaker, would provide consumers with up to a $7,500 
incentive to trade in an older, less fuel-efficient vehicle for a new, 
more fuel-efficient vehicle. And we know this is an idea that will work 
because it already has.
  In this case, consumers actually get the immediacy at the point of 
sale, not later on in the year when they might be doing their tax 
returns to get a credit or something, but when they are purchasing a 
car they would get a voucher for this. And the good thing is as well 
that dealers don't actually have to take that trade-in and have it 
sitting on the lot, either. That car would be scrapped. But, as I say, 
we know it would work because we have seen what has happened.
  Recently, the German Government introduced a similar incentive, and 
in February German car sales were up 22 percent, as sales fell, as we 
all are painfully aware, around the rest of the world.
  There was an op-ed in today's USA Today by Bill Ford, and it is 
titled, ``Cash in Old Cars for New Ones. Economy, Consumers, Automakers 
Would All Benefit.'' This is written by Bill Ford of the Ford Motor 
Company. And I will also say that this bill is supported by all of the 
Big Three, General Motors, and Chrysler, as well as supported by the 
UAW.
  I submit for printing in the Record this op-ed.

                     Cash in Old Cars for New Ones

                             (By Bill Ford)

       In spite of the many challenges our country faces, I 
     strongly believe the government stimulus and other steps to 
     thaw credit markets will be effective in driving economic 
     growth over time.
       But we still face an immediate and serious challenge. Last 
     week, President Obama observed that U.S. auto sales have seen 
     a huge drop-off, starkly noting ``every automaker is getting 
     killed right now.'' In just one year, U.S. auto sales have 
     fallen by nearly 50%. And March's sales numbers promise to be 
     sobering for foreign and domestic automakers.
       This unprecedented trend is sustainable for neither the 
     industry nor the economy. We urgently need to draw reluctant 
     consumers back into the marketplace. The good news is that 
     there is a proven initiative, outlined by the president on 
     Monday, that can help consumers overcome their fear. The plan 
     also would help the environment and increase energy security. 
     It has been called a ``fleet modernization'' or a 
     ``scrappage'' program. Whatever the name--it works.
       In January, the German government enacted a consumer 
     incentive equivalent to $3,200 to scrap automobiles that are 
     at least 9 years old and buy new, more environmentally 
     advanced vehicles. By February, sales of new vehicles jumped 
     21% over the same month a year before. Countries such as 
     Japan, France, Italy, South Korea and others are considering 
     or already have similar programs.
       This model can work in the U.S., too. President Obama said 
     that he would like to use parts of the economic stimulus 
     package to fund a program that would give consumers a 
     ``generous credit'' when they replace an older car with a 
     new, more fuel-efficient car.
       President Obama has rightly emphasized the importance of 
     vehicle fuel-efficiency gains and expressed concern about 
     shrinking U.S. auto sales and the risk it poses to the 
     economy. This program could help the environment and jobs.


                       How the program would work

       Here's how one bipartisan proposal before Congress would 
     work to stimulate new vehicle purchases. The program would 
     provide vouchers to consumers for vehicles at least 9 years 
     old. The vouchers likely would be worth more than the current 
     value of their vehicle. For example, a consumer who turns in 
     an older car could get a voucher ranging from $4,000 to 
     $5,000 to use as a down payment on a $20,000 car that exceeds 
     27 miles per gallon. Combined with current auto sales 
     incentives, consumers likely will get unprecedented deals on 
     more fuel-efficient cars.
       An independent analyst, Barclays Capital, estimates that 
     this proposal could boost sales by 2.5 million units if 2% of 
     eligible vehicles were traded in. This surge in sales would 
     help preserve American jobs in communities across the 
     country.
       Taxpayers are rightly concerned about the federal deficit 
     given the significant spending on the economic stimulus. Let 
     me clarify, Ford is in a different position and is not 
     seeking emergency taxpayer assistance. Nonetheless, Congress 
     needs to spur consumer demand for autos--the largest purchase 
     a family makes after a home.
       This vehicle modernization idea would require additional 
     investment by taxpayers. Its cost would be dependent on how 
     Congress structures the incentive and its duration. The 
     alternative, however, if sales do not rebound quickly, is 
     more job losses, more home foreclosures, and less revenue for 
     governments that must provide more jobless and health care 
     benefits.
       In addition to its consumer benefits, this initiative would 
     help reduce our carbon footprint. Automakers are accelerating 
     efforts to reduce greenhouse gases, but the latest fuel-
     economy rules apply only to new cars. This proposal would 
     help America get greener faster by retiring a portion of the 
     240 million vehicles on the road. It could reduce our 
     CO2 emissions by millions of metric tons per year.


                   fuel efficiency means lower costs

       The program also would help contribute to greater energy 
     independence. Replacing an older car with a new, more fuel-
     efficient one drives down gas consumption. That helps 
     consumers, too. In fact, the Department of

[[Page 9144]]

     Energy estimates a family could save $780 per year by moving 
     from a vehicle with 18 miles per gallon to one with 30 mpg.
       The auto industry, both foreign and domestic, needs to work 
     together to do our part in turning the economy around. But we 
     also need to use the tools that our government possesses, and 
     routinely deploys in so many other ways, to help move the 
     economy more swiftly to a better place.
       Improved auto sales will be one of the key indicators that 
     America is on the road to economic recovery. As Congress 
     weighs a national energy policy, climate change or even more 
     stimulus measures, we urge lawmakers to consider this market-
     based consumer incentive. This fleet modernization idea would 
     be a win-win-win for the consumer, the economy, the 
     environment.

  This is a bipartisan piece of legislation. It is very important to 
say this. This is bipartisan legislation, and it accomplishes two very 
important goals: First, it gets customers into the showrooms by buying 
vehicles and, of course, to help keep people working, as well as 
getting more fuel-efficient cars on the roads and reducing our 
dependence on foreign oil. So it is a win-win all the way around.
  I believe that this is a prescription that our auto industry needs. I 
think it is a critical component, Madam Speaker, of the road forward 
for the auto industry and our Nation, and I would urge all of my 
colleagues to join us to help preserve jobs, to help consumers, and to 
reduce our dependence on foreign oil and protect this vital industry.

                          ____________________