Two cheers for McCain on Cash-for-Clunkers - Washington Examiner Editorial

August 3, 2009

Loads of people are happy to have Uncle Sam give them $4,500 towards the purchase of a shiny new car. Wow, who knew?

That’s why nobody in Washington was prepared last week when thousands of people showed up in car dealer showrooms ready to sign on the dotted line, so long as the dealer could get them that $4,500 rebate from Washington.

The government was so ill-prepared for the onslaught of buyers that the computer system was frozen and virtually all of the $1 billion set aside for the program was spoken for by the weekend. So Congress went to work and lickety-split, the House approved another $2 billion – taken from TARP bailout funds – to keep Cash for Clunkers going.

The Senate is expected to follow suit this week.

Well, maybe not if Sen. John McCain, R-AZ, and Sen. Clair McCaskill, D-MO, have any say in the matter.

"Within a few weeks we will see that this process was abused by speculators and people who took advantage of what is basically a huge government subsidy of corporations that they already
own," McCain told Fox News.

The Missouri Democrat Twittered her opposition to the proposal Saturday. It’s not clear how far McCain and McCaskill will go in fighting to stop expansion of Cash for Clunkers.

There are lots of solid reasons, however, why they should do whatever is necessary legislatively to kill this program before it’s too late.

First, nobody should get their hopes up that Cash for Clunkers is going to make much of a dent in the nation’s dependence upon foreign oil. An estimated 250,000 older vehicles will be taken off the road as a result of the first $1 billion, which leaves only 249,750,000 to go.

In other words, a mere 0.01 percent of the current fleet of cars on the road will be replaced.

Plus, when people get better mileage, they tend to drive more, with a result that net fuel consumption increases. Even if it is assumed that another $2 billion will be approved for Cars for Clunkers, that will only mean 0.30 of the current vehicle fleet will be replaced.

The impact on fuel consumption or the environment will be miniscule at best. Second, Cars for Clunkers illustrates one of Washington’s greatest ills – politicians cannot resist the temptation to take Peter’s tax dollars and give them to Paul. If $1 billion is good, then why not spend another $5 billion or $10 billion?

Why not even make it permanent? But eventually, the politicians run out of productive taxpayers to loot on behalf of others.

Kill Cash for Clunkers now while there’s still time.