Senate lawmakers will begin to debate this week the a measure which was approved by the House to provide $2 billion in additional funding for the Cash for Clunkers bill.

The bill was signed into law by President Obama on June 24, 2009 which put in play the creation of the Car Allowance Rebate System (CARS) which is operated by the NHTSA.

We predict that the Senate discussion will be far from friendly. In fact, the initial $1 billion in funding barely made it out of the Senate alive.

The original $1 billion in funding was appended to a larger spending bill and a motion was raised to strip the Cash for Clunkers funding out of the bill. A floor vote was called in the Senate and supporters needed 60 votes to keep the Cash for Clunkers bill alive; they got exactly 60 votes.

With the initial measure passing by just one vote, opponents of the original bill will be gearing up for an even stronger opposition in round two of the Cash for Clunkers cat fight. Some Senators have even threatened a filibuster to block additional funding.

CARS Program Broke

Without additional funding the Cash for Clunkers program may be called to an immediate stop. The initial $1 billion in funding is already gone and Washington can’t let the program run out of gas for too long.

If the Senate vote is blocked or delayed, Washington will be forced to come up with another way to supply the promised funds to reimburse car dealers for trades that have been submitted. The program roll-out has been far from smooth and the lack of clarity about funding is par for the course.

In spite of being out of cash, the NHTSA and Transportation Secretary Raymond LaHood have confidently said that the program is running as planned and has encouraged consumers to go out and purchase a new car under the CARS program.

Firm End Date A Better Choice

Dealers and consumers would be better off if Congress set a firm end date for the Cash for Clunkers program and not a dollar amount. This would take away the fear of funding running out and give consumers and dealers clear notice on when the last day of CARS transactions can be made.

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