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WASHINGTON: A top White House adviser said Friday that business opponents of President Obama’s plan to create an agency to protect financial consumers are trying to “scare people.”Larry Summers, director of Obama’s National Economic Council, criticized an ad campaign by the U.S. Chamber of Commerce for suggesting that a new consumer agency will hurt small businesses that extend credit to their customers.Summers compared the advertisements to the “death panel ads” invoked by opponents of health care reform.”I’d suggest those ads are the financial regulatory equivalent to the death panel ads being run with respect to health care,” Summers said in a speech at Georgetown University. “Those without a good argument try to scare people … that’s what is happening here.”Summers’ comments are the harshest yet by a high-ranking White House official directed at foes of the consumer agency proposal, which has become the flash point in the congressional debate over how to overhaul the financial system to prevent future crises.President Obama, during his weekly address on Saturday, also turned up the heat against campaigns to kill the consumer agency. He called creation of the agency key to financial system reforms, because they aim to help those who “signed contracts they didn’t fully understand offered by lenders who didn’t always tell the truth.”Obama railed that “lobbyists for big Wall Street banks are hard at work trying to stop reforms that would hold them accountable and they want to keep things just the way they are.”The proposed Consumer Financial Protection Agency would be able to examine and subpoena information from banks, while regulating things like mortgages and credit cards.Summers didn’t name the Chamber of Commerce, but he described its ads in detail, which say the proposed agency would prevent small retailers like florists and bakers from being able to extend credit to their customers. The Chamber, one of the most powerful business lobbies in Washington, had announced earlier this month that it is spending 2 million to fight the proposal. On Friday, a spokesman said the group stands by its argument that the bill goes too far.”Adding a layer of bureaucracy is not the right answer to consumer protection,” Chamber spokesman Eric Wohlschlegel said.0:00
/6:11Wall Street’s new regulationsThe Chamber says the ads are intended to point out the group’s concern that the proposal is vaguely worded and could apply to many different kinds of businesses.In talking about the ads, Summers also detailed top White House priorities for regulatory reforms. “We’ve become convinced that consumer financial regulation be carried out by an independent body whose mandate is exclusively consumer protection,” Summers said. “This idea, which one might not have supposed to be the most controversial has generated substantial controversy.”

Source:CNN

WASHINGTON (CNN) — The Obama administration is looking hard at pushing through a health-care reform bill without Republican backing, top Democrats close to the White House have told CNN.The Democratic majority in the Senate has been stymied in the health-care debate by Republicans and conservative Democrats, leaving them short of the 60-vote “filibuster-proof” margin needed to pass the bill.Democratic success could depend on an obscure tactic called reconciliation, a type of budget maneuver that requires only a simple majority — 51 votes — to pass.Congressional Democrats authorized the maneuver specifically for health-care reform legislation during the debate over the 2010 budget, which passed in April.One top Senate Republican warned at the time that using reconciliation to pass such a measure would be “like a declaration of war.”Going it alone could be risky for Democrats, not because they couldn’t raise the votes, but because Republicans could cast it as a power play, accusing them of failing to win bipartisan support. A Quinnipiac University survey released two weeks ago showed that 59% of registered voters nationwide oppose passage of health-care legislation if the bill fails to win bipartisan support.White House Press Secretary Robert Gibbs insisted Wednesday that President Barack Obama has not yet given up hope for a bipartisan plan.0:00
/3:16Affordable health care”The president has said countless times he will work with anybody and everybody who wants to work constructively on health-care reform,” Gibbs said.”We continue to be hopeful that we can get bipartisan support and we’ll continue to work with those that are interested in doing that.”But moving ahead on a more partisan basis might ultimately be a strategy Democrats are willing to employ.”If we have to push it through this way, no one is going to remember how messy it was,” a top White House adviser told CNN. “At the end of the day, they’ll remember we got health-care reform done. A win is a win.”White House officials are beginning to lay the groundwork for such a move, telling CNN that they’ll have to take drastic measures if there’s no movement.Sources from the administration and the Democratic side of Capitol Hill have told CNN that they’re becoming increasingly convinced that Republicans — particularly Iowa Sen. Charles Grassley — involved in the negotiating process aren’t serious about striking a deal.Grassley is one of six members of the Senate Finance Committee — three Democrats and three Republicans — negotiating the only bipartisan health-care legislation so far.The six negotiators are not considering a government-funded public health insurance option favored by President Barack Obama and Democratic leaders, but are looking at nonprofit cooperatives that would negotiate collective polices for members.Grassley warned at a weekend town hall meeting that the months of negotiations may fail to produce a bill he can support.Asked for a response to the Democrats’ claims Wednesday, Grassley told CNN, “I’ve said all year that something as big and important as health-care legislation should have broad-based support. So far, no one has developed that kind of support, either in Congress or at the White House. That doesn’t mean we should quit. It means we should keep working until we can put something together that gets that widespread support.”Gibbs appeared to back Grassley, telling reporters that there are “Republicans on the Finance Committee and others that we believe are working in a constructive way to get reform through the Senate and ultimately to (the president’s) desk.”If Democrats choose to go it alone, the public health insurance option is likely to be back on the table, because there would be no need to win the votes of Republicans or conservative Democrats. But it would be a change in tactics after the White House appeared to shift its stance on the issue over the weekend.On Saturday, Obama said the “public option, whether we have it or we don’t have it, is not the entirety of health-care reform.”Then on Sunday, Health and Human Services Secretary Kathleen Sebelius said a public option is “not an essential element” of overhauling the health-care system.Their comments were interpreted in media reports as a softening of the administration’s support for the public insurance option.However, Sebelius denied Tuesday that anything had changed in Obama’s policy.”Here’s the bottom line: Absolutely nothing has changed,” she said at a Medicare conference. “We continue to support the public option. That will help lower costs, give American consumers more choice and keep private insurers honest. If people have other ideas about how to accomplish these goals, we’ll look at those, too. But the public option is a very good way to do this.”Earlier, White House Press Secretary Robert Gibbs said Obama and Sebelius have consistently called for making health insurance affordable to all in a competitive market, and that they think a public option is the best way to do so, but were open to other ideas.– CNN’s Ed Henry and Dana Bash contributed to this report.

Source:CNN

NEW YORK (Reuters) — A leading Democrat in the U.S. House of Representatives who has rebuffed Republican efforts to subpoena records of a mortgage program for favored borrowers at Countrywide Financial Corp. got home loans from that lender, the Wall Street Journal reported Friday.Representative Edolphus Towns, chairman of the House Oversight and Government Reform Committee, obtained two loans from Countrywide, which was bought last year by Bank of America , the newspaper said, citing information from the lawmaker’s mortgage documents.Towns has turned down calls from the committee’s ranking Republican, Darrell Issa, for the panel to subpoena mortgage records showing who received loans through Countrywide’s VIP program, the journal said.The program offered loans to politically influential figures and other favored borrowers at more attractive terms than were available to the general public.The mortgage documents on the loans to Towns contain a Countrywide address and branch number that correspond to the VIP program, the Journal reported.Towns told the paper through a spokeswoman that his decision not to subpoena the VIP records “has nothing to do with his mortgages” and that if the mortgages came through the VIP program “it was without his knowledge.”Towns was not immediately available for comment outside regular U.S. office hours.In June, Issa wrote to Bank of America (BAC, Fortune 500) asking it to disclose any special mortgage terms the bank’s Countrywide unit gave to politically influential customers over an eight-year period. Bank of America bought Countrywide last year after the mortgage lender collapsed under the weight of bad mortgages and defaults.Countrywide’s VIP program of preferential mortgage rates was also known as the “Friends of Angelo” program, after Countrywide founder Angelo Mozilo.In February, Senate Banking Committee Chairman Chris Dodd, a Democrat, said he would refinance two mortgages that he took out in 2003 under Countrywide’s VIP program.

Source:CNN

WASHINGTON (Reuters) — Government regulators could prohibit incentive-based pay packages at large U.S. financial institutions that encourage “inappropriate risks” under a bill approved Friday by the U.S. House.Heading next to the Senate, where its outlook is uncertain, the bill would also give shareholders in public corporations the right to cast annual, non-binding votes on executive pay, giving them a louder, but largely symbolic “say on pay.”The House Democrats’ bill, part of a broad push to tighten banking and market regulation, would also impose new standards on corporate compensation committees and compensation consultants, requiring them to be independent of managers.Financial institutions with assets of less than 1 billion would be exempted from the regulation on incentive-based pay.

Source:CNN

NEW YORK: The House on Friday passed a bill to allocate another 2 billion to the Cash for Clunkers program.The move came after reports on Thursday had raised concerns that the program was out of money.The bill which diverts 2 billion from a U.S. Department of Energy program loan guarantee program, passed 316-109. The bill will face tough opposition in the Senate which is not expected to vote before Monday.”I’m pleased about the progress made in the House today about the cash for clunkers program,” said President Obama, in a speech immediately following the vote.The fate of the 1 billion trade-in program was thrown into question Thursday over concerns that it may have already burned through its funds less than a week after it was officially launched.It was unclear how much longer car buyers would be able to trade in clunkers after reports surfaced on Thursday night that the program would be suspended.Obama, in his Friday speech, presented the program as a success: “I’m happy to report that it has already succeeded beyond our expectations. It’s working so well that there are legitimate concerns that the original funds might already be exhausted.”One of the Clunker program’s main champions in Congress, Sen. Debbie Stabenow, D-Mich., said the incentive has provided an important boost to the economy and resulted in 200,000 car sales.”I am delighted to hear dealers say that all of their salespeople are busy and they are selling more cars in a day than they had been selling in a month,” Stabenow said.Cash for Clunkers, which Congress passed in June, was set to end on Nov. 1 or whenever its 1 billion budget was depleted. An earlier version of the Clunkers proposal called for appropriating 4 billion.On Friday morning, the government’s official CARS.gov Web site, set up to provide dealers and consumers with information about the plan, still showed 780 million remaining in the coffers.But many dealers say they are still waiting to proceed.Under the plan as enacted, vehicles purchased after July 1 will be eligible for refund vouchers worth 3,500 to 4,500 on traded-in gas guzzlers. The trade-in vehicle has to get combined city and highway fuel economy ratings of 18 miles per gallon or less.The program aims at helping the struggling auto industry by taking inefficient cars off the road and spurring new sales.Domestic auto sales have been hit hard by the recession and credit crunch and helped propel the bankruptcies and government bailouts of General Motors and Chrysler. In June, the seasonally adjusted annual sales rate fell to 9.7 million, a pace well below recent years.

Source:CNN

WASHINGTON (CNN) — The White House has criticized the Congressional Budget Office’s findings that the Obama administration’s proposal to control Medicare costs would yield a moderate savings of 2 billion over the next decade.White House Budget Director Peter Orszag said the CBO’s analysis — which it relayed to House Majority Leader Steny Hoyer on Saturday — could feed a perception of the office’s bias toward “exaggerating costs and underestimating savings.”"The point of the proposal … was never to generate savings over the next decade,” Orszag said in a letter posted on Saturday.”Instead the goal is to provide a mechanism for improving quality of care for beneficiaries and reducing costs over the long term.”CBO Director Doug Elmendorf’s letter to Hoyer on Saturday was in response to the Senate Majority Leader’s request for analysis on “possible approaches for giving the President broad authority to make changes in the Medicare program,” Elmendorf wrote.The Obama administration is touting a proposal to give a medical advisory council the power to help decide the scope of coverage that would be eligible for reimbursement under Medicare.Administration officials say the proposed “Independent Medicare Advisory Council” would both improve health care quality and control costs. Some health care industry groups object to the proposal, saying such a council would not be qualified to make those judgments.The CBO’s review of the proposal found that “the probability is high that no savings would be realized … but there is also a chance that substantial savings might be realized,” Elmendorf wrote.0:00
/5:47The great healthcare challenge”Looking beyond the 10-year-budget window, CBO expects that this proposal would generate larger but still modest savings on the same probabilistic basis.”Orszag, a former director of the CBO, pointed out that “it is very rare for CBO to conclude that a specific legislative proposal would generate significant long-term savings so it is noteworthy that, with some modifications, CBO reached such a conclusion with regard to the IMAC (Independent Medicare Advisory Council) concept.”But he also criticized Elmendorf’s findings.”As a former CBO director, I can attest that CBO is sometimes accused of a bias toward exaggerating costs and underestimating savings. Unfortunately, parts of today’s analysis from CBO could feed that perception,” Orszag said. “In providing a quantitative estimate of long-term effects without any analytical basis for doing so, CBO seems to have overstepped.”The new council, if approved, would replace the current Medicare Payment Advisory Commission, which is made up of doctors and health care experts. Once a year, it gives recommendations about coverage and reimbursement rates for Medicare but has no authority to enforce its ideas. Its report in March recommended that payments for primary care physicians be increased and home health services rates be decreased.The proposed council would be comprised of doctors and health care experts making their recommendations based on extensive data and analysis of best health care practices, according to administration officials.It would be an independent executive branch agency — which would give its recommendations more weight. The president would have to approve or disapprove the its recommendations as a package. If it is approved, the package would be enacted if Congress did not vote against it within 30 days.Proponents believe this would improve care and help eliminate some of the wasteful spending by doctors who are now paid separately for each visit and procedure they authorize. Instead, this council could recommend, for example, a comprehensive approach to treat a patient with chronic heart condition or high cholesterol.The administration says that by encouraging doctors to follow this type of plan, the government will save money by cutting out unnecessary treatments and procedures. The council’s recommendations would then go to the commission overseeing Medicare to determine the specific procedures and the actual reimbursement amount.”It is not an exercise in just cutting reimbursement rates. In fact, in some cases, we may need higher reimbursement rates for certain aspects,” President Obama explained at a town hall meeting in Shaker Heights, Ohio, on Thursday.The members of the proposed Independent Medicare Advisory Council would study different procedures done nationwide to determine what are the best treatments being given in order to determine their recommendations.Administration officials, though, say this council will not make decisions about what coverage a patient gets.Still, opponents view this proposal as “big brother” dictating medical treatment.The conservative Heritage Foundation describes the initiative as being “the equivalent of a federal health board determining how health care was rationed for all seniors.”–CNN’s Kevin Bohn, Jessica Yellin, and Ed Henry contributed to this report.

Source:CNN

WASHINGTON (CNN) — President Barack Obama’s White House staff appears to be safe from a tax increase, for now.The White House on Wednesday issued its annual report to Congress listing the salaries of all staff, revealing that everyone gets paid less than 200,000.During the election campaign, Obama promised no income tax increase for anyone making under 250,000.The report, which did not include the president’s salary, showed that David Marcozzi, the director of public health policy, is the top paid White House staffer at 192,934 a year, with better-known figures such as Chief of Staff Rahm Emanuel and Senior Advisor David Axelrod getting 172,200.Obama froze all salaries above 100,000 upon taking office, affecting 146 staff members including his personal aide Reggie Love, who is paid 102,000 a year.Other notables are Robert Gibbs, the White House press secretary, and National Economic Council director Lawrence Summers — both at 172,200- – and Nancy-Ann DeParle, director of the White House office for health care reform, at 158,500.

Source:CNN

NEW YORK: The House approved a sweeping energy and climate bill Friday which could for the first time usher in widespread government restrictions on greenhouse gases and help renewable energy become cost competitive with fossil fuels.The central part of the legislation limits the amount of carbon dioxide, the main gas behind global warming, that companies like electric utilities, gasoline refiners, chemical firms and other large users of energy can put into the atmosphere. There were previously no restrictions on carbon dioxide emissions. The bill aims to cut greenhouse gas emissions by over 80% by 2050, in-line with what scientists say is needed to avoid the worst effects of global warming.Meeting those targets is expected to cost the average household 175 a year by 2020, according to a recent analysts by the Congressional Budget Office.But that estimate is widely disputed, with opponents saying it will cost far more and supporters saying consumers will actually save money by reducing their energy use.Consumers will mainly see this cost increase in the form of higher electric bills and gas prices. The impact on the Federal budget is minimal, with one analysis suggesting that it could actually increase revenues a bit.Opposition to the bill stemmed largely from the costs. House leadership and the Obama administration struggled all week to bring their own party together on the issue, and it was a tough sell. Several Democrats from coal producing or big manufacturing states voted against the measure, afraid of what higher energy prices may mean for their constituents. Most all Republicans voted against it.While some environmental groups and lawmakers also opposed the bill on the grounds it was too weak, it has the support of many mainstream environmentalists as well as several of the industries it will regulate. The bill now heads to the Senate, which isn’t expected to take up the matter until the fall. There’s considerably more opposition to the plan in the Senate.But the Obama administration, which would like some domestic progress on cap-and-trade when U.S. negotiators show up in Copenhagen at the end of the year to hammer out a successor to the Kyoto Treaty, will likely keep pressure on Congress. This is currently being done by a thinly veiled threat to use the EPA to regulate greenhouse gases, a process most observers say would be even costlier than a cap-and-trade plan.The bill also includes a requirement that utilities get at least 20% of their power from renewable sources by 2020, hikes building efficiency standards 50% by 2016, and includes over 20 billion for electric car research and development. OriginsEnvironmentalists and other clean energy advocates have been saying for years the nation needs to put a price on carbon dioxide if it wants to let cleaner forms of energy compete with cheaper fossil fuels and avoid the potentially disastrous effects of global warming. But up until now, those efforts have failed.Just 10 years ago the Senate rejected the Kyoto Treaty – a similar plan to the one passed Friday – by a vote of 95 to zero. But in the intervening years public and scientific opinion around climate change has shifted. High energy prices, Hurricane Katrina, and the buzz over Al Gore’s movie “An Inconvenient Truth” have all been cited as reasons for the change. But mostly it’s the scientific opinion that’s changed, with scientists becoming more certain that global warming is happening, caused largely by humans and may have serious consequences. Earlier this month, government scientists at the National Oceanic and Atmospheric Administration said evidence of climate change was already apparent in the United States, and that “the current trend in the emission of greenhouse gas pollution is significantly above the worst-case scenario that this and other reports have considered.”It went on to say that heat waves will become more intense, leading to human health problems and affecting crop and livestock production; water shortages will increase; ocean waters will rise, killing coral reefs and impacting tourism and fisheries; greater outbreaks of insect infestations and wildfires will occur; and rising sea levels will inundate coastal buildings and infrastructure.If greenhouse gases are not curbed, by 2100 damages from global warming could cost the country 1.8 trillion a year, according to a study by The Natural Resources Defense Council.How cap-and-trade worksThis is where the House bill comes in. Known as Waxman-Markey after its two sponsors, Henry Waxman (D-Calif.) and Ed Markey (D-Mass.), the bill attempts to reduce greenhouse gas emissions through a system known as cap-and-trade.Under a cap-and-trade plan, the government requires companies emitting large amounts of greenhouse gases to obtain a permit for each ton they emit each year.Most of these companies are electricity generators, including big industry that generates its own power. The number of permits issued each year is then reduced. As the more limited supply of permits increases their price, companies can either pay to install cleaner equipment, fund carbon-offset projects like tree farms, or buy these permits on a secondary market from other companies that have cleaned up their operations and now have extra permits to sell.The ultimate goal is to make fossil fuels, the main source of energy and of man-made carbon emissions, more expensive and low carbon technologies like wind, solar and nuclear more competitive.0:00
/4:30Gen. Clark: ‘Wind is ready to go’While the overall costs of the program are huge – over 100 billion a year – the bill pumps much of this money back into the economy and into consumers’ pockets. It requires the electricity generators to buy the permits from local utilities, which receive them free from the government, or to buy them from the government itself.Then this money will be used for a host of programs that benefit electricity users including energy efficiency retrofits, tax credits for low income families hard hit by the price increase, and subsidies for the steel, concrete and chemical industries that might suffer from competition with companies in countries that don’t have a cap-and-trade law. This is how the CBO came to estimate the household cost as a relatively low 175. For some, any price increase is too much.”I don’t think it maters what the number is,” said Laura Henderson, a spokeswoman for the Institute for Energy Research, which opposed the bill. “We’re in a recession. People can’t afford an increase in something they need so much.”The bill is bound to face stiff opposition from Senate members hearing similar concerns from their constituents.”In a year when we haven’t seen much of an economic recovery, going forward with a bill that will raise prices is probably going to be difficult,” said Whitney Stanco, an energy policy analyst at Concept Capital.Eventually, Stanko thinks that companies will have to pay to emit carbon.”In our view Congress will likely be compelled to enact greenhouse gas emissions legislation rather than let the EPA regulate,” said Stanco, although she said that might not happen until after the 2010 elections.In the meantime, opponents will continue to use the cost issue to fight the bill, as well as a more ideological approach.Some, including most economists, say a simple carbon tax would be a more efficient way to reduce greenhouse gases.Many in the political sphere oppose a cap-and-trade plan right now because they say the benefits don’t outweigh the costs. In short, they don’t think global warming will present as big of a problem as some say, and argue that it will be far cheaper to deal with the issue in the future when the costs of cleaner energy technology falls.It’s not a view shared by most scientists that study the issue.”Implementing sizable and sustained reductions in carbon dioxide emissions as soon as possible would significantly reduce the pace and the overall amount of climate change,” the NOAA scientists wrote, “and would be more effective than reductions of the same size initiated later.”

Source:CNN

WASHINGTON (CNN) — House Republicans on Wednesday presented what they called a “sorely needed” alternative to Democrats’ proposals to overhaul health care.Republicans want to make sure all Americans have access to affordable coverage, Rep. Eric Cantor, the House minority whip, said Wednesday.”We do so by making sure we keep down costs and incorporate the ability for folks to pool together to access lower costs, to bring private sector into the game and keep government out,” Cantor said.Neither Democrats nor Republicans have detailed how they would pay for their proposals. Rep. Roy Blunt, R-Miss., said his party’s plan will cost “far less” than that of the Democrats and “provide better results for the American people.”0:00
/4:22Geithner: Health care’s criticalRep. Dave Camp, R-Mich., who co-authored the GOP plan, said it’s important to make sure the bill is one with a “common-sense approach.”"We are not going to have a bill that is larger than the GDP [gross domestic product] of most countries, which is what we are beginning to see roll out,” said Camp, the ranking Republican on the House Ways and Means Committee.”Clearly, if we move forward and this bill is on the floor, we are going to have to have a bill that is paid for and that’s going to depend on what the scores come back.”A score is a preliminary estimate of the cost of proposed legislation. A preliminary review by the Congressional Budget Office of a plan being drawn up in the Senate found it would cost about 1 trillion over 10 years to extend health insurance to 16 million people who otherwise would not be covered, about a third of the roughly 45 million now uninsured.Camp said that the House Republican proposal calls for refundable tax credits for lower-income Americans.0:00
/4:21Curing public health careBut Camp and Republicans have not determined key details for their proposal, including the amount of those tax credits or who precisely could be eligible.House Republicans on Wednesday planned to release a two-page summary of Camp’s proposal, which CNN Radio obtained.Some highlights include:~”Pools” of insurance. It would let states, small businesses and others group together to offer lower-cost, health care plans. Such pools would have to offer, at a minimum, any coverage that is provided in a majority of states.~Medicaid transfer. It would allow Medicaid users to take the value of their Medicaid benefits and transfer/apply those to a private health care plan instead.~Boosting of health care savings accounts. It would increase incentives for people, especially those in lower income brackets or over 55, to build up HSAs.~Automatic insurance. It would encourage employers to sign up their workers for health insurance automatically, so that employees would have to “opt out” of coverage if they didn’t want it.This Republican alternative bill also contains several ideas that are increasingly championed by both parties.~Longer coverage for youths. It would allow dependent children to stay on their parents’ policies until they are 25.~Promotion of wellness at the workplace. It would encourage employers to reward employees for improved health.~Expansion of community health centers.~Mobile health care. It would allow Americans to maintain their specific health insurance policies when they lose or leave jobs.~In-home care. It would provide financial help and encourage more in-home care over institutions.~Limitations on malpractice lawsuits. There is general agreement over limiting such lawsuits, but a deep divide exists over exactly how much.This House Republican plan comes a day after fellow Republican Rep. Mark Kirk of Illinois and other moderates in the so-called Tuesday Group released their proposal, which spelled out many of the same ideas as the Camp bill.Kirk contends his plan is less partisan but said he supports Camp’s effort. — CNN’s Lisa Desjardins contributed to this report.

Source:CNN

WASHINGTON: The House on Tuesday waded deeper into the rescue of the troubled auto industry when it passed a 4 billion plan to subsidize new cars sales for consumers who scrap old ones.By a vote of 298-119, the House approved the “cash for clunkers” program. The measure would give consumers vouchers worth as much as 4,500 to turn in gas guzzlers and buy new cars that are more fuel efficient.The legislation now goes to the Senate. President Obama has said he supports such a measure.The House bill would go into effect within 30 days of enactment but it is not retroactive for new purchases made earlier this year.The move by the House would deepen the federal government’s involvement in the auto industry, only a week after federal officials announced spending another 30 billion in addition to the 19.4 billion already given to GM to cover its losses and operations.”The bipartisan cars act will shore up millions of jobs and stimulate local economies. It will improve our environment and reduce our dependence on foreign oil,” said bill sponsor Rep. Betty Sutton, D-Ohio, during floor debate. “The cars act demonstrates that we can free ourselves from the false argument of either you are for the environment or you are for jobs. You can do both, you must do both.”While the original cash-for-clunkers proposal had its roots in an environmental initiative, this bill aims to jump-start sales of new cars and trucks, including some that don’t quite meet the average fuel efficiency standards.0:00
/2:05Cash for clunkersClunkers eligible for the program must get 18 miles per gallon, or less, in combined city and highway driving. The subsidy ends up benefiting more owners of light trucks, SUVs and mini-vans more than it would owners of regular old passenger cars, auto experts say.A 3,500 subsidy can be used toward purchasing cars and vans that are more fuel efficient than the older clunkers by four miles per gallon. A 4,500 subsidy can be used toward purchasing cars and vans that are more fuel efficient than older cars by 10 miles per gallon.However, cars that have not been insured for the past year or those that are older than 25 years are not eligible to be traded in for vouchers.The House measure aims to spend 4 billion in new dollars toward the measure, and was expected to get added through a war supplemental funding bill. That could prove to be a sticking point, since some Republicans in the Senate said they rather such a measure use already allocated dollars.”We’re going to have to pay the piper at some time,” said Rep. Jeff Flake, R-Ariz. “This is a clunker of a bill.”The program lasts either one year or until the funding runs out.So now the focus turns to the Senate, where two versions of a subsidy bill have been introduced. Neither has yet to be voted on or fully debated.The Senate proposal that is most similar to the House bill is sponsored by Sen. Debbie Stabenow, D-Mich., along with Sen. Sam Brownback, R-Kansas. That bill takes its funding from existing stimulus dollars and is retroactive for new purchases made since March 31.Environmental lobbying groups are pushing for an environmentally tougher bill geared more toward cutting carbon emissions. That measure, sponsored by Sen. Dianne Feinstein, D-Calif., aims to replace more gas guzzlers with more environmentally sensitive and fuel efficient cars.

Source:CNN