The House of Representatives on Friday quickly approved legislation that would add $2 billion to the government’s "cash-for-clunkers" program after demand threatened to bankrupt the program.
The plan, formally called the Car Allowance Rebate System (CARS), provides credits of as much as $4,500 for a new car when turning in an older vehicle.
The program, which was opposed by some GOP lawmakers, proved so popular that the initial $950 million set aside for it is running out. The money was expected to last until November.(…)
Economists believe that the cash-for-clunkers program would be a significant boost to auto production in the third quarter. This could be a big factor in turning growth positive in July-September after a record four straight quarterly declines in gross domestic product. Read more about the latest GDP data.
Even fiscally conservative Blue-Dog Democrats said they expected Congress to find additional funds for the program. They expect the funds to be found from other government programs and be deficit-neutral.
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