Don Manzullo should promote his $5,000 car voucher plan to Obama
March 30th, 2009 at 10:03pm Chuck Sweeny
Is this Don Manzullo’s big chance? In his tough talk Monday about the government’s intervention in GM and Chrysler, President Obama said he’s willing to consider ideas that have been promoted by congressmen to encourage people to buy automobiles.
Specifically, he talked about a so-called “clunker” bill:
“Finally, several members of Congress have proposed an even more ambitious incentive program to increase car sales while modernizing our auto fleet. Such fleet modernization programs, which provide a generous credit to consumers who turn in old, less fuel efficient cars and purchase cleaner cars have been successful in boosting auto sales in a number of European countries. I want to work with Congress to identify parts of the Recovery Act that could be trimmed to fund such a program, and make it retroactive starting today. ”
That’s not quite what Congressman Manzullo has in mind, but I think it is close enough that he should go full tilt in promoting his plan to the president.
Manzullo’s plan would have the government pay for $5,000 vouchers to anyone buying a new car. The voucher would be applied by the dealer at the point of sale. Don’s plan doesn’t talk about clunker trade-ins, but it’s in the same ballpark.
Entry Filed under: Uncategorized
13 Comments Add your own
1. Egyas | March 31st, 2009 at 1:24 am
$5000 voucher + trade in value + credit for getting a more fuel efficient vehicle could add up to $8000 (roughly, more or less) in credits. That would probably boost sales.
The main drawback I see is doing this ON TOP OF the massive handout we’re about to give to the big3. We cannot afford what we are already giving. Now, if you’re talking about doing it IN PLACE OF Obama’s current plan, I’m all for it.
2. Monkey | March 31st, 2009 at 6:50 am
If they pass a program like that, is it just American cars or can I use that to buy a Honda/Audi/BMW, etc? If it’s only American cars, that won’t fly for a lot of people.
3. Egyas | March 31st, 2009 at 7:19 am
Well, since the goal is to keep the big3 from going under, it would make sense that it would have to be one of their cars.
4. hokumboy | March 31st, 2009 at 8:36 am
What about us folks that have perfectly good, paid off, autos and can see no reason to go into debt for a car we don’t need?
Of course Darling Don’s only against taxpayers having national , and not personal debt. And, that’s a recent epiphany, since he didn’t seem to complain very loudly when the Bush Administration was in charge.
Oh, and our “foreign” car is made in the States.
5. Monkey | March 31st, 2009 at 2:38 pm
And Honda/Nissan/BMW/Toyota employ thousands of U.S. residents at their plants. So, why limit it to American cars?
All due respect to the Big Three auto makers: you build better cars and I’ll buy one. But, until that happens, I’ll stick with my two Japanese cars, one of which has 210K and runs like a dream. . .
6. Pete | March 31st, 2009 at 8:23 pm
I encourage all to read and review Rep. Manzullo’s bill. I looked it up on www.thomas.gov and the bill number is H.R. 1606. Basically, the bill provides a $5,000 voucher for any new light vehicle at the point of sale at the dealership. With about 80 percent of cars that are sold in America are assembled in America, limiting the selection to manufacturer or domestic content is difficult because, as some have already pointed out, several “foreign” cars are more American than cars made by the Big 3 when examing the source of the parts.
With regard to hokumboy’s comment, I looked at the websites of various taxpayer rights groups and discovered that Rep. Manzullo is the most fiscally conservative Member of the Illinois delegation for all the votes he has cast during his tenure in Congress. So, it isn’t a “recent epiphany” that he cares about spending. He’s always been a fiscal conservative. We were making progress once again on reducing the deficit until the Democrats took over control of Congress. The deficit hit a record $413 billion in 2004 and when Republicans lost control of Congress, the deficit was $165 billion. Those numbers seem relatively small now with a projected deficit this year of nearly $2 trillion. And we’re about to double the national debt in 8 years.
7. Craig Knauss | March 31st, 2009 at 8:25 pm
Is the plan for “American” cars or for cars built in America? Or both? There are four or five Japanese manufacturers who have plants in the U.S. One of them is in Bloomington. I would hope such a plan would encourage purchases directly benefitting American taxpayers such as auto workers.
8. Pete | March 31st, 2009 at 9:00 pm
It seems to me that it’s for any car as long as it cost under $50,000. That takes out many of the high-end fancy sports cars and luxury vehicles that are mostly made overseas from this proposal. Unfortuately, any government incentive to benefit just domestic companies would run afoul of our international trade obligations, subjecting other U.S. exports to higher tarrifs equilvant to the value of the domestic incentive (because we wouldn’t want a foreign country to enact a similar consumer incentive that discrimates against U.S. auto exports). Again, because 80 percent of the vehicles sold in America are assembled in America, this $5,000 voucher would greatly assist the entire auto manufacturing industry located in the United States.
9. coldhotel | April 3rd, 2009 at 7:16 am
I would like to see the credit targeted towards vehicle that achieve at least some goal of fuel efficiency and/or emissions standards. I’d rally hate to see us subsidize monstosities such as an Escalade.
10. Craig Knauss | April 3rd, 2009 at 10:04 am
Pete said, “(it) would run afoul of our international trade obligations, subjecting other U.S. exports to higher tarrifs equivalant (sic) to the value of the domestic incentive (because we wouldn’t want a foreign country to enact a similar consumer incentive that discrimates (sic) against U.S. auto exports)….” Gee, isn’t that what happened in the 1980s? Except we did NOT subsidize our domestic cars OR tack on outrageous tariffs on the Japanese cars. However, the Japanese DID tack on ridiculous tariffs on our cars. And how long has Europe been subsidizing Airbus? They’ll just have to deal with it!
Coldhotel said, “I’d rally hate to see us subsidize monstosities (sic) such as an Escalade.” I agree, but can you buy a new Escalade for under $50,000?
11. Pete | April 3rd, 2009 at 7:49 pm
Craig, all those items you raised was before the WTO Agreement was signed in 1994, which forbids subsidies or incentives for domestic products at the expense of foreign products. That’s why the U.S. has challenged the subsidies that Airbus gets before the WTO. The case is working its way through the process.
Unfortunately, if the U.S. provides for a domestic incentive just for U.S.-made cars, then Japan, Korea, and Europe will most likely file a WTO case and win relatively quickly because it is such a cut and dry issue. The penalties would most likely be higher tariffs on our exports equivalent to the lost benefit to them, most likely on our auto exports, such as cars made in Belvidere, and auto parts — thus negating the initial benefit of the consumer incentive.
You may be interested to know that when Germany was thinking of a similar domestic-only benefit for their automakers when they were crafting their “cash to clunkers” legislation, the European Union persuaded them to not limit the benefit just to German car makers. Thus, the benefit there is open to all automakers that make higher fuel efficient cars. Thus, the rules of trade worked in this instance. But keep in mind that the $50,000 limit in Rep. Manzullo’s bill appears to me to limit much of the benefit to foreign cars imported into the U.S. since most of the cars made in that price range are expensive foreign sports cars and luxury vehicle ($60K+ Escalade, nothwithstanding!).
12. Craig Knauss | April 4th, 2009 at 9:55 am
Pete,
All that makes sense. However, how many cars do we sell in Japan and Korea? My guess is they’re few and far between. And the times I was in Europe, American cars were extremely rare. I saw more of them in Russia than in Scandanavia, Netherlands, etc. Maybe that’s changed. It’s been about nine years since I was last there.
13. Pete | April 4th, 2009 at 12:15 pm
I agree that we don’t sell too many U.S.-made cars in Japan and Korea (that has it’s own set of problems primarily due to a lack of dealership network to service cars) but it may surprise (and hopefully encourage readers) that we do sell a lot of cars in other parts of the world. I look at the Foreign Trade Statistics database at the U.S. Census Bureau and discovered that in 2008, the U.S. exported nearly $50 billion worth of fully assembled cars all over the world. I also remember reading an article in the RRS just about a year ago that said the Chrysler sold 30,937 Calibers in 2007 made in Belvidere outside of North America (U.S., Canada, and Mexico). This was out of a total of 157,562 Calibers sold worldwide. That represents about 20 percent of total plant production! There was also a similar article in the Wall Street Journal on April 8, 2008 that, in part, highlighted the Belvidere plant, mentioning that thus far in the year, more than 15,000 vehicles made at the Belvidere facility had been exported to Europe, up 40 percent from the previous year (2007). Thus, the situation did change. But I’m sure that with the massive drop-off in U.S. exports in Dec., Jan, Feb, and March because of our recession, these statistics have unfortunately changed for the worse. We won’t know for sure because export statistics lag about 3-4 months.
Leave a Comment
Some HTML allowed:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>
Trackback this post | Subscribe to the comments via RSS Feed