Mr. President, I rise today to offer legislation to establish a Cash for Clunkers proposal with my colleagues, Senators Susan Collins, Charles Schumer, and Thomas Carper. This proposal would…
Mr. President, I rise today to offer legislation to establish a Cash for Clunkers proposal with my colleagues, Senators Susan Collins, Charles Schumer, and Thomas Carper.
This proposal would establish a Federal incentive program designed to encourage consumers to turn in their gas guzzling vehicles and buy more fuel efficient vehicles.
It would be authorized for 1 year, and provide for one to two million car or truck purchases. It would be funded with up to $4 billion from the American Recovery and Reinvestment Act, to be identified by the President and approved by Congress under an expedited rescission procedure. There are approximately 47 million vehicles on the road today that could qualify for trade-in under this program.
This proposal will help stimulate auto sales at a time when sales are at historic lows.
U.S. auto sales tumbled by 37 percent from March of last year. Two of the three American auto companies have filed for bankruptcy, GM and Chrysler. Auto dealerships are closing. Tens of thousands of jobs have already been lost--and thousands more hang in the balance.
There is no question that our Nation's auto industry is in trouble, and all of us want to help.
But the whole point of a cash-for-clunkers program is to replace a clunker with a more fuel-efficient vehicle. Otherwise the program replaces a clunker with a guzzler, and destroys a good vehicle for one that is not fuel efficient.
So, the goal of the Feinstein-Collins ``cash for clunkers'' proposal is to require real fuel economy improvements--improvements that are lacking in the Auto Industry proposal.
Unfortunately, the Auto Industry proposal would allow for the scrapping of perfectly adequate vehicles in return for new gas guzzlers, like the 2009 Hummer H3T.
For example: a consumer could trade the 2005 Chevy Silverado 1500 4- wheel drive for a 2009 Hummer 3T 4-wheel drive, even though both vehicles are below size-adjusted CAFE standards for large pick-up trucks.
So this trade would be, in fact, replacing a clunker with a guzzler. The consumer would receive a voucher of $4,500 to make this trade. This is unacceptable.
In contrast, the Feinstein-Collins proposal that I am offering today would save 32 percent more than the Auto Industry proposal in oil use and reduced greenhouse gas emissions.
To be specific, it would save 11,451 barrels of oil per day, versus 8,706 barrels in the industry proposal; save 176 gallons of gas per vehicle per year; versus 133 gallons in the industry proposal; and save 1.91 million metric tons of emissions per year; versus 1.45 million metric tons in the industry proposal.
Our proposal is supported by a coalition of those who care about reducing America's consumption of fossil fuels, including: CarMax, one of the Nation's largest car dealers; evironmental groups, including the Sierra Club; efficiency advocates, including the American Council for an Energy Efficient Economy, ACEEE, the Alliance to Save Energy, and the Union of Concerned Scientists, UCS; and consumer groups, including the Consumer Federation of America.
I believe the Feinstein-Collins bill is a sensible, balanced proposal that achieves better fuel mileage--32 percent more than the Auto Industry proposal--and would result in the rapid exchange of between one to two million vehicles.
Let me take a moment to outline the key differences between our proposal and the other Auto Industry proposal.
First, our bill would require that the newly purchased vehicles under this program have above-average fuel economy for their class.
For newly purchased cars: our proposal requires the vehicle get 24 miles per gallon, the current fleetwide average for cars. Auto proposal requires only 22 mpg.
For midsize SUVs and minivans: our proposal requires 20 mpg, the current fleetwide average for that class of vehicles. Auto proposal requires only 18 mpg.
For large pickups: our proposal requires 17 mpg, the current size adjusted
CAFE standard for this largest class of vehicles. Auto proposal requires only 15 mpg.
So, our bill is 2 miles per gallon better in every category of vehicle.
Second, our proposal targets some of the worst gas guzzling offenders on the road.
Under our proposal, the trade-in vehicle would be required to have a fuel economy of 17 miles per gallon or less--instead of the 18 miles per gallon threshold of the Auto Industry proposal. This would achieve greater oil savings by targeting the least efficient 47 million vehicles on the road today.
Third, our proposal would allow leased vehicles and newer used cars to qualify, in order to encourage greater participation by low-income consumers.
Our program would allow consumers who have signed three to five year leases to qualify for a voucher worth 50 percent of the value of a voucher for a new car. Last year, 18 percent of new vehicles were leased, so this is a sizable part of the auto marketplace and shouldn't be overlooked.
In contrast, the Auto Industry proposal makes no allowance for leased vehicle participation with typical terms, of 3 to 5 years.
Our proposal would also allow newer used cars like the 2007 Ford Escape Hybrid to be purchased through the program. 40 million used cars were sold in the U.S. last year--so I believe it makes sense to include these used cars and increase the rate of participation.
Our proposal creates a three-tier voucher system to provide the most financial payment to the consumer willing to save the most oil: $2,500 for the minimum fuel economy improvement of 7 mpg for cars and 3 mpg for trucks. $3,500 for a moderate fuel economy improvement of 10 mpg for cars, 6 mpg for mid-size SUVs, and 5 mpg for large trucks. $4,500 for the maximum fuel economy improvement of 13 mpg for cars, 9 mpg for midsize SUVs, and 7 mpg for large trucks.
So, the more you improve fuel efficiency, the more money you get.
In contrast, the Auto Industry proposal would scrap perfectly adequate vehicles in return for a voucher to help put more gas guzzling vehicles on the road.
In the SUV category, the Auto Industry proposal would provide consumers with a voucher of $3,500 to increase fuel economy from the traded-in vehicle to the new vehicle by only 2 mpg. For large pick-up trucks, it requires only a 1 mpg improvement.
Over the last 5 years, fuel economy standards for trucks and SUVs have gone up 2.4 mpg--so in many cases the industry proposal would subsidize people for trading in their old truck or SUV for the exact same model.
Let me discuss some examples: $3,500 to trade in the 2002 Jeep Cherokee for the 2009 Jeep Cherokee. $4,500 to trade in a 2005 four- wheel drive Chevy Silverado for a 2009 four-wheel drive Chevy Silverado. $3,500 to trade in a 2003 four-wheel drive Dodge Ram Pick-up for a four-wheel drive Dodge Ram Pick-up. $3,500 to trade in a 2002 Toyota 4-Runner for a 2009 Toyota 4-Runner SUV.
The examples go on and on.
With respect to fuel economy?
I strongly believe that--merely 2 years after passing the Ten-in-Ten Fuel Economy Act--we should not subsidize the purchase of inefficient vehicles.
This could have the effect of bringing down the fleetwide average fuel economy. In other words, it would nullify all we fought for in the passage of the first CAFE bill to improve fuel efficiency in 20 years.
But that is exactly what the Auto proposal would do: 68 percent of all cars sold last year, in 2008, 18 percent of which have below average fuel economy, 24 mpg or less--would qualify for the industry proposal. 28 percent of below-average SUVs and small pick-ups would also qualify for subsidy.
But it is in the large pick up category that the fuel economy threshold--15 miles per gallon--is remarkably weak under the Auto Industry proposal.
Under the other program, 96 percent of all new large pick-ups--not work trucks, but regular large pick-ups--which are the least fuel efficient vehicles on the road today, would qualify for subsidized purchase. More than 90 percent of below average new heavy duty pick-ups would qualify.
Gas guzzlers like these big pick-up trucks simply do not belong in this program.
I recognize that some believe this should be the goal of the program.
But these large pickups make up the least efficient class of all vehicles on the road. So, if there are 1 million more of these vehicles sold through this program--that would not have been sold otherwise--it could dramatically lower the fleetwide average fuel economy for new vehicles sold this year.
That is why I believe these inefficient, big pickup trucks don't belong in the ``cash for clunkers'' proposal.
In contrast, our proposal encourages the purchase of those vehicles that have above average fuel economy for their class.
Finally, I would like to take a few moments to counter one of the arguments from the other side.
There are those who have mistakenly claimed that this bill, which prioritizes fuel efficiency, would give an unfair advantage to foreign automakers.
Nothing could be further from the truth.
In fact, the American auto industry has produced some very popular models of more fuel efficient vehicles, and our bill would incentivize their purchase.
Together, these three firms build 44 to 50 percent of all vehicle models that would qualify for our program's proposal in model year 2009.
According to EPA, in 2008, General Motors sold 1.2 million vehicles that would have met the higher fuel economy thresholds in our bill. And Ford and Chrysler sold more than 465,000 and 593,000 vehicles last year, respectively, that could have met the thresholds in our proposal.
That means that there were 2.2 million fuel efficient vehicles sold last year--manufactured by the Big Three Auto companies--and all of them bought without the incentives in place.
So, just imagine how many could be sold this year with the incentives.
That is the point of this ``cash for clunkers'' bill--to encourage the sale of fuel efficient vehicles.
For many models, GM, Ford and Chrysler can scale up production of their most fuel efficient configurations of their current models in their current factories.
They can make more V-6 trucks, instead of V-8 trucks.
They can use 6-speed automatic transmissions instead of 4-speed.
They can make more 2 wheel-drive trucks.
For example, Ford makes a 15 mpg version and a 17 mpg version of its best selling 2009 F-150. It is the same truck, from the same factory.
This is true for all firms.
Chrysler builds a 17 mpg configuration and a 15 mpg configuration of its 2009 Dodge Dakota pick-up in Warren, MI.
GM builds 17 mpg configurations of the 2009 Chevy Silverado and the GMC Sierra pick-ups in Fort Wayne, IN, as well as less efficient configurations.
Ford builds 17 mpg configurations of its 2009 Ford Explorer Sport Trac pick-up in Louisville, KY, and less efficient versions as well.
But the difference is that our proposal would create an incentive for Ford, GM, and Chrysler to manufacture more of the fuel efficient, 17 mpg models.
Also last year, 100 percent of all large pickups and large vans sold that would have met the higher fuel economy thresholds in our bill were either built by the Detroit Three or in an American factory.
So, I think our bill strikes a better balance.
Contrary to what some may think, I do not believe that greater fuel economy and increased auto sales have to be considered as competing goals, but rather can be understood as complementary.
I think it is evident that our bill would achieve better fuel efficiency for the consumer, and would provide a more sound investment for the taxpayer.
Our program would also allow the vouchers to be used to buy used cars or even lease a more fuel efficient vehicle.
These options are important, especially to lower income Americans who need a new car but cannot afford to buy a new vehicle. The other version of this legislation would deprive many Americans of the opportunity to participate in the program.
Bottom line--we have chosen reasonable fuel economy levels that save more oil and help all firms, including the Detroit three, sell cars at a time when sales are desperately needed.
So, I encourage my colleagues to support the Feinstein-Collins- Schumer-Carper proposal, rather than the Auto Industry proposal.
Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.