US "Cash for Clunkers" Bill Gets Green Light

The time for debate is now over, as the dreaded by some-dreamed of by others cash for clunkers bill has passed yesterday the U.S. House of Representatives vote. At a macro level, the bill is intended, through the $4 billion in cash vouchers, to both boost new car sales and also rid the environment of the so called gas-guzzlers.

"History shows that one of the quickest ways to end a recession is to sell more automobiles," Representative Gary Peters of Michigan, one of the 298 Representatives to vote in favor of the bill was quoted as saying by Reuters.

An American equivalent of the European scrappage incentives, the cash for clunkers bill, as it came to be know, will offer a $4,500 voucher for every car or truck purchased. In all, it is expected the bill will boost auto sales by about 625,000 vehicles.

According to the provisions of the bill, cars with less than 18 mpg EPA combined mileage ratings would get, when traded-in, anywhere in between $3,500 and $4,500, depending on the mileage of the vehicle. In addition, to qualify, vehicles must be insured for at least the past year, to avoid black market moves.

"This timely, targeted and temporary program will put money directly in the hands of consumers and work to reduce fuel consumption and greenhouse gas emissions," Pete Lawson, vice president of government affairs at Ford Motor told the source.

The fight is not over though, as the bill cannot exist "as is". It must be included into a larger incentive plan, as President Obama asked the Congress. Following this step, the incentive must be considered by the U.S. Senate. Sources say the program will be ready within weeks.