WASHINGTON Bob Corker, a Republican member from Tennessee who sits on the Senate Banking Committee, said he backs extending the "cash-for-clunkers" program if the extra $2 billion is taken out of a previously approved economic stimulus package.
Corker, who initially opposed the program, told Reuters Television on Tuesday that he would "strongly consider substituting" cash-for-clunkers for other less effective portions of the $787 billion stimulus package passed earlier this year.
The government's $1 billion cash-for-clunkers program, which allows rebates up to $4,500 for old cars that are traded in for newer and more fuel-efficient ones, has run out of money after an unexpected avalanche of business exhausted its funds.
Corker also spoke out against the Obama administration's sweeping plan for financial regulation overhaul, especially a proposal to create a new consumer agency with broad power to write and enforce rules on financial products such as credit cards and mortgages.
"Much of what they have put forth is an overreach," Corker said.
He said the Senate Banking Committee has not yet reached a consensus on how to best approach financial regulation. But he said there was general agreement a resolution authority was needed to permit an orderly failure of a bank holding company.
Corker and Democrat Mark Warner introduced legislation last week that would give the Federal Deposit Insurance Corp the power to wind down bank holding companies, calling it an interim step.
Corker also expressed support for Federal Reserve Chairman Ben Bernanke, but said it is "somewhat ludicrous" to believe a single regulator could identify all systemic risks to financial markets.
The administration has proposed giving the Federal Reserve greater authority to monitor systemic risk, along with a council of regulators that would support the Fed in that role.
Bernanke's term as Fed chairman expires at the end of January and so far President Obama has not indicated whether he backs Bernanke for another term.
(Reporting by Karey Wutkowski and Glenn Somerville. Editing by Robert MacMillan and Carol Bishopric)