Reuters:WASHINGTON (Reuters) - The U.S. government has suspended its "cash for clunkers" incentive program to spur U.S. auto sales after an avalanche of business, a lawmaker said on Thursday.
Democratic Senator Debbie Stabenow of Michigan said more than 200,000 vehicles had been sold since the program was formally launched six days ago, pushing available funding in the form of consumer rebates near its limit.
July 30, 2009 AP sources:
Govt to suspend 'cash for clunkers'By KEN THOMAS
Associated Press Writer
The government plans to suspend its popular "cash for clunkers" program amid concerns it could quickly use up the $1 billion in rebates for new car purchases, congressional officials said Thursday.
The Transportation Department called lawmakers' offices to alert them to the decision to suspend the program at midnight Thursday. The program offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle.
The congressional officials spoke on condition of anonymity because they were not authorized to speak publicly.
A White House official said later that officials were assessing the situation facing the popular program but auto dealers and consumers should have confidence that transactions under the program that already have taken place would be honored.
Rae Tyson, a spokesman for the National Highway Traffic Safety Administration, which administers the program, declined comment.
Congress last month approved the Car Allowance Rebate System program, known as CARS, to boost auto sales and remove some inefficient cars and trucks from the roads. The program kicked off last Friday and was heavily publicized by car companies and auto dealers.
Through late Wednesday, 22,782 vehicles had been purchased through the program and nearly $96 million had been spent. But dealers raised concerns about large backlogs in the processing of the deals in the government system, prompting the suspension.