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Press Release

For Immediate Release
Contacts:
Samantha Slater (Donnelly) 202-225-3915
Sean Bonyun (Upton) 202-225-3761
April 2, 2009

Donnelly & Upton: Bipartisan Cash for Clunkers Bill will Boost Region's Economy
Innovative measure helps consumers and auto sales – all the while improving the environment and preserving jobs

WASHINGTON, DC – U.S. Reps. Joe Donnelly (D-South Bend) and Fred Upton (R-St. Joseph) have co-sponsored bipartisan "cash for clunkers" legislation to take older, less fuel efficient cars off the road and stimulate new car sales. The bipartisan Consumer Assistance to Recycle and Save (CARS) Act, H.R. 1550, will provide consumers a $3,000 to $5,000 incentive to turn in vehicles that are eight years or older and purchase more fuel-efficient vehicles or to obtain a transit voucher. President Obama voiced support for the program to boost the auto industry on Monday.

"Not only will this legislation provide a much-needed boost to our auto industry, but it will also help us achieve energy independence while creating local jobs," Donnelly said. "In this tough economic climate, it is essential that we provide every incentive to help folks buy cars and put people back to work. I look forward to working with my colleagues in Congress to get this bill passed."

"The first step on the road to recovery is to get Americans back in the showroom buying cars again, and this bill will do just that," said Upton. "I am heartened with the Administration's recognition that we must address consumer incentives to boost the auto industry as car sales have plummeted across the globe. Cash for clunkers will immediately boost flagging auto sales, stimulate the economy and put folks back to work, not to mention we'll dramatically reduce emissions and our dependence on Mideast oil with more fuel efficient vehicles on the road."

The CARS Act is modeled after Germany's scrap program which led to a 21% surge in auto sales in February 2009, compared to a 22% decline in the United Kingdom for the same period. Similar programs have now been implemented in 12 European countries and have helped drive up auto sales across the continent.

In the legislation, new car purchases that qualify for this incentive must achieve a minimum of 27 miles per gallon on highways, while new trucks must achieve a minimum of 24 mpg for highway driving. The bill provides graduated incentives based on greater fuel efficiency. The legislation also offers transit vouchers in exchange for older, high emission vehicles.

The CARS Act provides consumers with a voucher to trade in older vehicles in exchange for newer, more fuel efficient models that are built in the United States and North America. The amount of the voucher ($3000 to $5000) depends on the new vehicle's fuel efficiency and where it is assembled. Vehicles built in the U.S. receive a slightly higher voucher than those assembled in other parts of North America - this also includes foreign transplants that build cars here in addition to Ford, Chrysler and General Motors. The bill also provides a $7,500 voucher toward the purchase of a new plug-in hybrid electric vehicle assembled in the U.S. from 2011 to 2016.

A summary of the legislation follows.

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Consumer Assistance To Recycle and Save (CARS) Act
H.R. 1550

On March 18, 2009, Congresswoman Betty Sutton (D-OH) and Candice Miller (R-MI) introduced the Consumer Assistance to Recycle and Save (CARS) Act. This bill provides consumers with an incentive to recycle older vehicles and replace them with new, cleaner, and more fuel efficient vehicles. Consumers with a car or truck that is 8 years or older (model year 2001) would be able to trade in their vehicle at a dealership for:

• a voucher toward the purchase of a new vehicle (costing less than $35,000 manufacturer’s suggested retail price); or
• a $3,000 voucher for public transportation.

Older vehicles would be scrapped and used for parts and materials. Cash voucher amounts range from $3,000 to $5,000 depending on the new vehicle’s level of fuel efficiency and where it is assembled. Higher fuel efficiency equals higher voucher amount. Products made in the U.S. would receive a higher amount than those made in Mexico or Canada.

For 2009, 2010 Model Years

Fuel Economy Requirements	Amount of voucher for vehicle assembled in the U.S.	Amount of voucher for vehicle assembled in North America
Cars, minimum highway of 27 mpg	$4,000	N/A
Cars, minimum highway of 30 mpg	$5,000	$4,000
Trucks, minimum highway of 24 mpg	$4,000	$3,000
Work Trucks, achieve cleaner federal emission standards than vehicle being replaced	$5,000	N/A

The CARS Act also promotes the future of electric vehicles by providing a $7,500 voucher toward the purchase of a new plug-in hybrid electric vehicle assembled in the U.S. from 2011 to 2016.

• This is a "consumers" bill -- Consumers will benefit from the incentive to purchase a new vehicle and from buying less fuel.
• This is a "jobs" bill -- The U.S. auto industry is a critical part of our national economy. By positively impacting sales, this bill helps support the millions of jobs in communities in every corner of our country that are tied to the auto industry.
• This is a "green" bill -– By removing older vehicles from the market, this bill will improve our environment, reduce fuel consumption, and reduce CO2 emissions.
• This is a "stimulus" bill -- U.S. new vehicle sales are down nearly 40 percent compared to a year ago. This bill provides an incentive to stimulate normal vehicle replacement demand which will help drive sales and economic activity.