Extending 'cash for clunkers': not so easy

The program to pay folks to trade in old, fuel in-efficient vehicles for new ones (which some have called nothing more than an automakers bailout) is close to running out of funds, so Congress wants to keep it going.
Sounds easy, right? Maybe not, say the guys at FBR Research.
The House might move $2 billion to the program from the renewable energy loan guarantee program as a temporary fix, at least to hold the popular program over during the House recess that begins on Saturday. The primary obstacle? The Senate.

“First, environmental lawmakers led by Senator Diane Feinstein (D-CA) are insisting that the program’s requirements for new vehicle fuel economy standards be strengthened. This same group is unlikely to be enthusiastic about taking money from the unfolding renewable energy loan guarantee program.
Second, we note a growing undercurrent of resentment of expensive automaker bailouts among fiscal conservatives. The Senate is not scheduled to adjourn until next week, but if the House passes a bill and adjourns, the Senate would face a “take it or leave it” situation and be unable to amend a bill before recess.

FBR gives a House bill for more funding and higher mpg requirements a greater-than-50 percent chance of Senate approval. A $2 billion extension of the current program seems less likley to pass.
Taking money from the renewable loan guarantee program shouldn’t really undermine it, the note says, since it’s been a bit slow to spend funds. Those funds could also be replaced later this year.