Cash for Clunkers Suspended?

Cash for Clunkers Suspended?

Has the Cash for Clunkers Program Been Suspended?

According to a report from ABC news, the government's car rebate program is about to run out of gas after only 1 week.

Congressional leaders are scrambling today to find a way to keep the wildly popular Cash for Clunkers program up and running after a heavy demand threatened to dry up the $1 billion set aside for the initiative.

White House spokesman Robert Gibbs said Friday that for now, the program that gives cash vouchers to people who trade in their gaz guzzling cars, "is up and continuing to run."

Congress will try to introduce legislation to provide an additional $2 billion into the program, and hope to get it passed by the House today, the last day before the House August recess begins.

The Senate remains in session through the end of next week. The "Cash for Clunkers" program was designed to help the struggling auto industry by giving owners of old cars money toward the purchase of a new, more fuel-efficient vehicle. But now the program appears to be running out of gas. It looks as if the money to buy up used cars has already been used up.

Thursday the White House announced that it was reviewing the program, denying earlier reports that "Cash for Clunkers" was being suspended. The conflicting announcements are creating confusion for buyers and car dealers alike.

"Cash for Clunkers" was supposed to continue through Nov. 1, 2009, or until the money ran out. But with the number of dealers participating, if each completed just a dozen cash for clunkers deals, the $1 billion would be spent. And some dealers have initiated more like 250 "Cash for Clunkers" deals -- 20 times what the government was expecting.

At Fitzgerald Toyota in Gaithersburg, Md., it's a different kind of car race as the sales staff rushes to process "Cash for Clunkers" transactions before the government slams the brakes on the program.

Thursday evening the Department of Transportation told lawmakers it was suspending the "Cash for Clunkers" program at the stroke of midnight. But then later the White House said it was still working to find other options."We are working tonight to assess the situation facing what is obviously an incredibly popular program," Gibbs said of what officially is called the Car Allowance Rebate System.

"Auto dealers and consumers should have confidence that all valid cars transactions that have taken place to date will be honored."The official Web site http://www.cars.gov/ showed there was still $779 million left -- clearly not the case. But the Web site was still up and apparently running Friday morning.