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WASHINGTON: The US House of Representatives voted on Friday to pump another two billion dollars into a programme that lets consumers trade in gas-guzzling cars and trucks for more efficient vehicles.
Lawmakers voted 316-109 to prime the "cash-for-clunkers" programme with monies taken from a giant economic stimulus package approved in early 2009 after the vastly popular effort burned through one billion dollars in its first week.
The measure must now clear the US Senate, where its fate is far less clear, amid disputes on whether to require higher fuel efficiency and greater emissions reductions before extending the campaign.
In a statement thanking the House for passing the legislation, President Barack Obama hailed the programme as "a successful part of our economic recovery (that) will help lessen our dangerous dependence on foreign oil, while reducing greenhouse gas emissions and improving the quality of the air we breathe.
"I urge the Senate to act with the American consumers in mind to pass this important legislation."
The programme offers owners of old cars and trucks as much as 4,500 dollars toward a new, more-efficient vehicle, a scheme meant to help stimulate the struggling auto industry while also helping the environment.
The plan is modelled on similar programmes in France, Germany, Italy and Spain, which have had some success in sparking sales of new autos.
"I'm happy to report that it has succeeded well beyond our expectations and all expectations, and we're already seeing a dramatic increase in showroom traffic at local car dealers," Obama told reporters earlier at a briefing.
"It's working so well that there are legitimate concerns that the funds in this programme might soon be exhausted. So we're now working with Congress ... to ensure that the programme can continue for everyone out there who's still looking to make a trade."
Obama added that he is "guardedly optimistic about the direction that our economy is going," but stressed that "we've got a lot more work to do."
Democratic Representative Dave Obey, the House Appropriations Committee chairman, said the programme had already resulted in 40,000 official requests and that at least 200,000 deals had been done but not yet officially submitted.
But some Republicans complained that the programme was another instance of government meddling improperly in the economy.
"Cash for Clunkers is another example of the government picking winners and losers and enshrines us as a bailout nation," said Republican Representative Jeb Hensarling of Texas.
"You cannot bail out, borrow and spend your way to prosperity. We now have the highest unemployment rate in a quarter of a century. The bailout mania approach to economic recovery is not working," he said.
Economist Himanshu Patel said the programme's shift into overdrive was a sign of pent-up consumer demand for new vehicles, adding that auto sale increases could lead to a rise in employment in four to six quarters.
He suggested that if the government cuts off funding, "carmakers will consider raising their own incentive offers in an effort to stimulate demand after having seen the powerful impact of the 4,000-dollar" offer. - AFP/de
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