BETHESDA, MD – The “Cash for Clunkers” amendment to the United States Senate stimulus package was withdrawn from the bill on Thursday.

The Cash for Clunkers proposal, developed by Sen. Debbie Stabenow, D-Mich., and Sen. Tom Harkin, D-Iowa, would call for any vehicle at least 10 years old to be traded in for a $10,000 credit from the government to purchase a newer vehicle that meets emissions standards. The credit would need to be used for new cars that get at least 25 miles per gallon (mpg), or trucks that get at least 20 mpg. The proposal came under fire from a number of automotive aftermarket associations, which claimed there is no evidence that the program will achieve the goal of boosting new car sales, as well as potentially negatively impacting the service and repair sector.

“We are thrilled that this amendment was withdrawn from the stimulus package,” said Kathleen Schmatz, president and CEO of the Automotive Aftermarket Industry Association (AAIA).  “This amendment was full of potholes from the beginning and once the Senators were informed of all the unintended harmful consequences that would have resulted from inclusion of this amendment in the bill, they made a very wise and informed decision to remove this amendment from the stimulus package.”

“Congress and states have considered Cash for Clunkers proposals in the past and in many cases have decided against them. Many legislators have come to realize the unintended consequences of this program and that they are not a cost-effective use of government money,” Schmatz concluded.

A number of industry associations joined AAIA in voicing opposition to the Cash for Clunkers program, including the Automotive Engine Rebuilders Association (AERA), Automotive Parts Remanufacturers Association (APRA), Automotive Warehouse Distributors Association (AWDA), Automotive Transmission Rebuilders Association (ATRA), Specialty Equipment Market Association (SEMA) and Tire Industry Association (TIA).

SEMA also issued a statement about the proposal being withdrawn.
 
“On behalf of SEMA (the Specialty Equipment Market Association) and its membership, we are pleased that the $16 billion cash for clunkers program was withdrawn from consideration in the Senate Economic stimulus bill tonight,” SEMA wrote on Friday. “Passage of such a program would cause serious dislocation in our industry and not constitute stimulus.

“We are equally pleased that the Senate voted to include a SEMA-supported amendment to the bill allowing taxpayers to claim a tax deduction for car-loan interest payments and excise taxes when they buy a new car in 2009. We applaud lawmakers for spending taxpayer money wisely rather than wasting dollars on programs that do not spur car sales, reduce emissions or increase fuel efficiency. SEMA looks forward to working with the House and Senate and all stakeholders on sound economic solutions to the current recession.

“Cash for Clunkers accelerates the demise of vehicles through the purchase of older cars, which are then typically crushed into blocks of sheet metal. Clunker programs focus on a car’s age rather than its emissions, based on the faulty assumption that all older cars are dirty.

“SEMA continues to believe that a cash for clunkers program would, for no proven gain, hurt thousands of independent repair shops, auto restorers, customizers and their customers across the country that depend on the used car market. The automotive specialty aftermarket provides thousands of American jobs and generates millions of dollars in local, state and federal tax revenues.”

According to a report from the Detroit Free Press, three other senators have proposed a more modest cash-for-clunkers plan that would offer owners of models that get less than 18 mpg vouchers of up to $4,500 toward a new vehicle.