CARS gave the industry a boost; it’s worth extending

CARS gave the industry a boost; it’s worth extending

The “cash for clunkers” program hasn’t been perfect, but it’s been a success.

Not all the numbers are in, but Ford Motor Co.’s top sales analyst credited the program with helping give Ford its first monthly sales increase in two years.

We’re sure there will be a lot of foreign-marque cars sold through the program, too, and that won’t sit well with some people. That was one of the complaints about a similar program that was launched in Germany earlier this year.

But the cash for clunkers was designed to do a number of things: get less fuel-efficient cars off the road, thus creating a long-range benefit in the need for imported oil; reduce pollution; give car sales a boost, which has a beneficial effect throughout the industry, from the assembly line to the dealership, and it provides and opportunity for thousands of people with older low-value trade-ins to do something they might not have dreamed about doing, buying a brand new car.

The popularity of the program was such that those who didn’t move quickly might be out of luck.

The $1 billion provided for the Car Allowance Rebate System (CARS) was designed to spur about 250,000 car sales and run for months. Within days, the Department of Transportation, which oversees the program, announced that it was running out of money.

The U.S. House responded quickly, approving a $2 billion additional appropriation on Friday. But it’s going to be a tougher fight in the Senate, where Sen. John McCain, R-Ariz., told reporters he is prepared to lead a filibuster.

Splitting the vote

Getting 60 votes to break that filibuster won’t be easy, since some Democrats expressed dissatisfaction with some parts of the original appropriation. On the other hand, some Republicans have already expressed their support for an extension, including Sen. George V. Voinovich of Ohio.

Voinovich, whose credentials as a deficit hawk are at least as good as McCain’s, also realizes that giving the nation’s last great manufacturing sector a shot in the arm makes good sense.

Former Federal Reserve Chairman Alan Greenspan said in an interview Sunday that car and truck building had begun to rebound even before the program got under way. But, he added, “there is no doubt that that very extraordinary response is a very important indicator that the state of confidence in the economy is beginning to pick up.” If the incentive program had gone into place six months ago, he said, “it would have probably been a dud.”

To the extent that the enthusiastic response to CARS reflects an increase in consumer confidence, opponents in the Senate might want to be careful. No senator, regardless of state or party, should want to be seen as tamping down consumer confidence just as it begins to grow.

If CARS needs some quick tweaking, the Senate should feel free to do so. Killing CARS would be a real clunker.