Senate Passes “Clunker-Free” Stimulus Bill

Cash for Clunkers Cadillac
SEMA-member companies and classic-car enthusiasts spoke loudly and helped eliminate a "Cash for Clunkers" provision from both the Senate and House versions of the economic stimulus bill.

SEMA praised the U.S. Senate and House of Representatives for passing "clunker-free" versions of the economic stimulus bill. The final bill to be signed into law by President Obama has no vehicle scrappage program. 

SEMA launched the largest grassroots effort in its 46-year history to oppose attempts by some Washington lawmakers to include a national car crushing program in the legislation. Thousands of SEMA members and SEMA Action Network (SAN) enthusiasts responded to a call for action urging legislators to reject the program. 

Cash for Clunkers programs accelerate the normal retirement of vehicles through the purchase of older cars which are then typically crushed into blocks of scrap metal. For 20 years, Congress has rejected this 'sounds good' idea because it fails to spur car sales, reduce vehicle emissions or raise fleet fuel economy.

Two proposals were considered during the debate. The first was an $8 billion program targeting SUVs and pickup trucks of any model year that make less than 18 mpg such as Chevy Silverados, Dodge Rams, Ford F-Series and Jeep Wranglers. The second would have provided $16 billion worth of cash vouchers toward the purchase of a new vehicle for lower-income individuals who allowed their turned-in cars to be destroyed. 

"SEMA continues to believe that a cash for clunkers program would, for no proven gain, hurt thousands of independent repair shops, auto restorers, customizers and their customers across the country that depend on the used car market," said SEMA Vice President of Government Affairs Steve McDonald. 

"We look forward to working with the House and Senate and all stakeholders on sound economic solutions to the current recession that will help drive product sales for the entire auto industry, including the vast automotive aftermarket and its specialty equipment segment." 

The stimulus bill includes a SEMA-supported amendment which allows taxpayers to claim a federal tax deduction on state sales/excise taxes when buying a new car in 2009. The tax break will cost about $2 billion. Lawmakers abandoned an $11 billion program that would have also allowed consumers to deduct car loan interest payments. 

The two Cash for Clunkers proposals may reemerge later this year. SEMA will remain vigilant in opposition. Meanwhile, SEMA thanks all member companies and SAN enthusiasts who donated their time and effort to contact legislators. Your voice helps protect our industry and hobby.

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