Congress rushes another $2 Billion Dollar Bailout for the Auto Industry!

In order to keep the Detroit Auto bailout going, Congress is rushing a 1 1/2 page bill to secure 2 BILLION more in our tax dollars to keep the Cash for Clunkers bill alive.  The program was suspended last night do to the rush in purchases.

I spoke to Todd Broyles at Mel Rapton Honda in Sacramento California about the program.  Here is what he said.

• the computer on-line system is very slow
• they will not let a car drive off the lot until it is approved.
• he estimates that dealers are setting on a backlog of entries that could blow out the $2 billion within a month
• his sales are up about 35%
• he expects the Gov’t to come through with the money in 10 days!

I asked him what was happening with the engines as I have heard stories that they are being shipped to China.  He told me they are required to pour sodium silicate in the engine, run it for awhile until it ruins it.

My concern is that many will buy a car, realize they can’t make the payments in a few months and then we will experience massive auto repo’s just like we have seen in the housing industry.  With no ‘skin’ in the game, buyers that get in trouble will just walk away from them.  I was against the program from the start and I am against the extra $2 billion being rammed through today.  Additionally I am concerned about this:

• this will create a sugar high for the industry.  In a few months they will tank as they suck out all the car buyers now.
• we need reliable used cars for college students, and those that can’t afford a new car.  We will wipe-out the used car market and make it tougher for those that are struggling already
• China is opening a new coal plant almost on a daily basis.  The amount this program will save in CO2 emissions will be negligible compared to the pollution China will send to us.
• this program grabs money from another bailout fund that should be paid back to the US taxpayer!

Here is my previous article on the story.

Today in the Senate, a provision called the “Cash for Clunkers” got slipped into the $105 billion supplemental  war bill.  It’s Christmas for your neighbor and for the automakers!

Here is how it works:

If you trade in a car that gets 18 mpg or less, come on down!

Door #1. For a car… $3,500 towards  a purchase of a new car if it gets 4 mpg or more.
Door #2.  For a truck… $3,500 if you buy a new truck that get 2 mpg more.
Door #3.  For a car… $4,500 if it get 10 mpg more. 
Door #4.  For a truck… $4,500 if it gets 5 mpg more.

Just own any trade-in car or truck for one year and you qualify!

OK, so what’s the deal?  The bill originally was a stand alone and it previously included a provision to trade up and get a “previously owned” car.  It also required the mpg factors to be way higher – 25% higher!

How did the bill get hijacked? Enter Detroit auto lobbyists.

Overnight this new provision was dropped into the supplemental war bill…tailored perfectly to this years new models and those stuck on auto dealers lots.

Now I am all for fuel efficiency, but if I don’t buy a new car, why am I paying for someone else to do so?

Most folks buying a car that is worn out are going to get better fuel mileage anyway. That’s just how it works. Today’s home air conditioners and way more efficient than a 10 year old model. Should we pay folks to replace those too? So now I am going to be supplementing their purchase  for an activity they would have done anyway?

Guess what Senators pushed to get this through? Those in the auto states.

I need some new windows, should I hold out until they sneak a new window provision in a bill and get paid to replace them?  When will it stop?

If this isn’t pork or a big fat earmark for Detroit, someone kick me!

It this how we motivate our citizens to do things in our country by buying them?

Throw some money at folks and we can get them to do anything we want?

That’s exactly how the housing industry got so screwed up. Did you know you could by a new car in America even if you are an illegal immigrant?  Whose watching for that?

Do you think dealerships are going to be scrutinizing that issue? Ahhh…that would be no.

I am fed up with all the pork barrel and give away programs that I have to pay for and derive no benefit.  How about you? Please send me to Washington to put a stop to all this!

The Paul Smith for Congress website is www.paulsmithforcongress.org
Paul Smith.  Republican Candidate for the 5th Congressional District (Sacramento).