WASHINGTON, D.C. – The Automotive Service Association (ASA) has reported that Sen. Charles Grassley (R-Iowa), ranking member of the U.S. Senate Committee on Finance, has written a letter of inquiry to Ray LaHood, secretary of the U.S. Department of Transportation (DOT), to find out where the start-up money for the “Cash for Clunkers” program, enacted in the summer of 2009, was spent. Grassley stated he feels it is his constitutional duty to “conduct oversight into the actions of the executive branch, including the activities of the Department of Transportation.” Grassley asked for an accounting of what companies and executive branch agencies received contracts from the DOT to process and sign the thousands of rebate checks.
The Consumer Assistance to Recycle and Save Act of 2009 (CARS), coined “Cash for Clunkers,” was intended to boost car sales in the United States. The CARS program originally provided $1 billion to assist auto dealers, but an additional $2 billion was appropriated by Congress to continue the program. Cash for Clunkers was intended to remove older, less-fuel-efficient vehicles from America’s highways and replace them with new, more-fuel-efficient vehicles.
Grassley expressed concern with the funding provision for the contractors in the extended program. He writes, “Pursuant to the legislation, the DOT had only 30 days after the date the legislation was enacted into law to engage contractors and stand up the program before the first rebates were issued. It is my understanding that the original legislation provided $50 million to cover the costs of these contracts, but no specific funding provision for the contractors was included with the additional $2 billion that was provided for the program. To date, the administration has not provided an accurate accounting of the administrative costs related to the Cash for Clunkers program and I believe that the American taxpayer deserves more information, not less, and that information needs to come sooner rather than later.”
Grassley continued, “In addition to auditing the individual transactions of the Cash for Clunkers program, I am interested in the corporations and executive branch agencies that received contracts from the DOT to process thousands of transactions generated by CARS. It seems to me that the administration chose an inherently risky approach to developing and implementing the Cash for Clunkers program and spent millions to get it up and running in record time with little regard for proper insight and accountability; thus creating an environment ripe for waste, fraud and abuse.”
To see a copy of Grassley’s letter of inquiry, visit ASA’s legislative Web site at www.TakingTheHill.com.
