Lawmakers push "clunker" plan to spur auto sales

WASHINGTON Wed Jan 14, 2009 6:41pm EST

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WASHINGTON (Reuters) - Congressional lawmakers proposed a consumer incentive on Wednesday to help revive slumping auto sales and get the oldest, most polluting and less fuel efficient vehicles off U.S. roads.

Industry executives and automaker lobbyists believe bipartisan "Cash for Clunkers" initiatives introduced in the House of Representatives and Senate offering up to $4,500 toward the purchase of a new vehicle is likely destined for economic stimulus legislation now taking shape.

"We face real challenges with trying to encourage drivers to trade in their older, less fuel efficient vehicles, particularly in this tough economic climate," said Dianne Feinstein, a California Democrat.

A congressional aide said no decision has been made about whether to include the measure in stimulus legislation.

The approach would permit consumers to collect a voucher from dealers designed to offset the cost of a new car. Vouchers could be used to cover transit costs in some cases. Old cars would be scrapped.

Environmental groups agree that older sport utilities, pickups and vans are among the worst polluters and reducing their population will reduce greenhouse gasses.

Proposed Senate legislation would fund the program through 2012, potentially targeting up to one million vehicles annually.

Similar programs are underway in Texas and California and in Europe.

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