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Senate Leaders Seek to Pass ‘Cash For Clunkers’ Without Changes

By Angela Greiling Keane and Holly Rosenkrantz

Aug. 6 (Bloomberg) -- The Senate is set to vote today on a proposal to inject $2 billion into the “cash for clunkers” auto discount program, while supporters try to block amendments that would stall the cash infusion.

Senate Majority Leader Harry Reid said last night that the Senate will consider seven amendments before voting on the measure, which the House passed last month.

One amendment, by Senator Tom Harkin, an Iowa Democrat, would place an income limit on participation in the program. Only individuals earning less than $50,000 or couples with incomes of less than $75,000 would be eligible under his plan.

Senator David Vitter, a Louisiana Republican, is sponsoring an amendment to set a date for eliminating the government’s troubled asset relief program, the financial bailout program known as TARP.

Making any alterations to the version the House passed July 31 would force a suspension in the auto discounts until the House could vote on the revisions after returning from recess on Sept. 8.

“We can’t allow this bill to be amended,” Jim Manley, a spokesman for Reid, said yesterday.

Infusing the program with more money is intended to extend it through August, after buyer demand exhausted an initial $1 billion in less than a week.

The government’s Car Allowance Rebate System provides credits of as much as $4,500 for the purchase of a new, more fuel-efficient vehicle when buyers turn in an older car or truck to be junked.

The Most Sales

General Motors Co., the largest U.S. automaker, has the most sales under the program, according to Transportation Department data released yesterday.

Detroit-based GM sold 18.7 percent of the cars purchased under the plan. Toyota Motor Corp. based in Toyota City, Japan, had the second-most sales with 17.9 percent. Dearborn, Michigan- based Ford Motor Co., was third with 16 percent. The agency released data on each automaker’s overall share a day after providing a list showing that four of the top five models sold were made by foreign automakers.

Toyota’s Corolla was the top model purchased by clunkers buyers through yesterday, surpassing Ford’s Focus, which had been No. 1, according to the data.

A Backlog

The Transportation Department had received 184,304 dealer applications for funds totaling $775 million through yesterday, as the agency works through a backlog that reached hundreds of thousands of online submissions.

Vehicles made by the three largest U.S. automakers -- General Motors, Ford and Chrysler Group LLC -- comprised fewer than half of sales under the program through yesterday, according to the Transportation Department data. The companies accounted for 45 percent of the clunkers transactions. Some vehicles sold by foreign companies are manufactured in the U.S.

Ford’s Explorer was the most popular trade-in vehicle, followed by Ford’s F150 pickup and Chrysler’s Jeep Grand Cherokee. All of the top 10 trade-in models are made by the three U.S. automakers.

The average fuel economy of the vehicles purchased is 25.3 miles-per-gallon, a 60 percent improvement over the 15.8 miles- per-gallon average of the trade-ins. One of the program’s intents was to improve fuel-efficiency of cars on U.S. roads.

To contact the reporters on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net; Holly Rosenkrantz in Washington at hrosenkrantz@bloomberg.net

Last Updated: August 6, 2009 00:00 EDT

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