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WORD COUNT
560
JUNE 10, 2009 YET
ANOTHER FAKE AUTO SOLUTION – by Ryan Alexander
Like a
late night infomercial, lawmakers in both parties are hawking “Cash for
Clunkers” - a plan that would boost auto sales, help the auto industry
and jumpstart the economy.
But wait
there’s more!
Lawmakers
say it will reduce oil consumption and auto emissions too!
How much
would you pay for such a program? Well Congress says the more than $3
billion price tag is a bargain. But like most quick fixes, reading the
fine print makes it clear that this plan falls far short of its lofty
goals.
Under
current provisions, people would receive a voucher towards the purchase
of a new vehicle upon trading in an older, less fuel efficient
one. Depending on the vehicle type and other variables, a person might
get up to $4,500.
If
Congress were really interested in reducing oil consumption and
emissions, vouchers would only be given to those who bought super
fuel-efficient (high mpg) types, or electric, or hybrid ones. Instead
the program is pretty nice to drivers of gas-guzzling SUVs. Purchase a
new large light-duty truck getting at least 15 mpg and you pocket the
maximum $4,500 if the improvement is as little as 2 mpg compared to your
trade-in.
Wow, some
improvement. Earlier legislation was much stronger, according to
critics.
Scratch
below the surface and the program is at cross-purposes. Carmakers need
to produce at least 5.5 million cars a year to survive, according to one
auto industry CEO. That’s a lot of emission from just the production
process – experts say that 10 percent to 12 percent of a vehicle’s
lifetime emissions are attributable to its production. Saving the car
industry and reducing carbon emissions may not be mutually exclusive
over the long run, but there is no quick fix.
California
already has its own version. So do France, Italy, and Germany, where the
program recently resulted in an estimated 20 percent increase in car
sales. But purchasing a new car crowds out other consumer purchases –
even with the voucher a new car eats up a lot of disposable income. And
industries that sell auto parts, or specialize in refurbishing or
maintaining older cars have cried foul both abroad and here. Also, gas
prices are down, so what’s the incentive to buy a new highly fuel
efficient vehicle when you can still receive a voucher to buy an SUV
that gets 15 mpg?
The
ultimate impact of the program has also come under fire from
transportation experts and analysts. Daniel Sperling, at the University
of California-Davis, warns that the program is too shortsighted to
affect oil consumption or emissions – it’s currently slated to last a
year, with estimates of one million new purchases. Another analysis
points out that only 5 percent of cars on the road would be
eligible. The program seems more about saving the U.S. truck and SUV
industry than anything else. But even that goal seems unlikely.
Congress
is fond of trying to please everyone at once. Word from Capitol Hill is
this legislative silver bullet will reduce oil dependence and emissions,
save Detroit, and provide a needed boost to the economy all at once. Not
likely. There are better ways to address emissions and oil
consumption. And the problems of the U.S. car industry and economy run
too deep for this feel good idea to be the savior. The only guarantee is
that taxpayers will end up spending billions.
--
Ms. Ryan Alexander is president, Taxpayers for Common Sense --a
non-partisan federal budget watchdog.
www.taxpayer.net
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