Just before dashing off for their August break, Congress today tripled the total investment in the Cash for Clunkers program, adding $2 billion to the existing $1 billion that's already been allocated and spent. Cash for Clunkers is the program under which car owners can trade in a qualifying vehicle -- one that gets 18 miles per gallon or less -- for another, more efficient vehicle. Improve the mileage by at least 4 mpg and you get $3,500 toward your new vehicle; raise it by 10, you get $4,500.
The downside so far is that the program isn't well-organized, and so we may be pouring good money into creating nationwide headaches for dealerships. There's another way to look at this, though: what if we think about Cash for Clunkers as a pilot program, instead of a discrete single-time slush fund?
Cash for Clunkers has been wildly popular so far, and it seems like a program that could benefit quite a wide swath of the population if it continues. People can get more fuel efficient cars, which is better for the environment and better for the country, as we start needing less fuel from overseas. The car dealerships make some sales, which means the people at the dealerships get to keep their jobs -- and get to spend their paychecks in the community. The auto industry gets the picture, that Americans are (slowly, yes, and perhaps not permanently) getting tired of driving gas hogs, and they continue (and perhaps accelerate) their race toward greener technology.
I'm a little afraid that, in the great governmental tradition, Cash for Clunkers will become either a a permanent program, unchanged except, probably, by increasing bureaucracy and internal inefficiency, or, worse, that it will become a one-off, one-time feel-good solution to a series of much larger problems. Congress gives Cash for Clunkers more funding and congratulates itself for helping business and the environment; consumers buy a (sometimes only slightly) better car, and feel better about their own investment; and everybody quickly forgets that this is a start, not an end.
Why not consider Cash for Clunkers a pilot program in a larger package of government involvement in improving America's motorpool? For instance, what of the cars -- as shown and noted extensively at No Cash for Clunkers -- that are, by condition if not by model, no longer as efficient as they could be? What if instead of $3,500 a person to buy a new vehicle, the government offered 30 or 40 percent vouchers toward repairs that make a vehicle more fuel efficient (pending government inspection)? What if they offered a flat $3,500 for turning in a car and replacing it with a bicycle? What if they handed out bus passes for free in the city, contingent upon the tickets being used for a certain number of trips every week?
Cash for Clunkers got quick Congressional support because it's being billed as an auto industry rescue plan as much as (and sometimes more than) an environmental program. Every program above, however, could be billed the same way. In this economy, job creation and retention are the magic bullets of legislation. Democrats and Republicans voted for C4C today. Maybe the same coalition could be swayed to make more major steps toward environmental protection in this, well, environment, if only the White House would work on framing the issue as one of long term economic protection instead of short-term economic intervention.