Just before returning to their home districts for a five week August recess, Representatives in the House passed legislation taking $2 billion out of the stimulus money appropriated for renewable energy construction, and turned the cash over to the "cash for clunkers" program which ran out of money after only one week of operation. If, as expected, the Senate passes the House measure before Senate adjournment Friday, this means the CARS program has received $3 billion total appropriations - $2 billion stolen from the construction industry.
The robbery doesn't end with the funds shifting measure, however. Every legislative action this session, it seems, has unintended consequences, and this bill ends up stealing another billion dollars from the construction industry. Three billion dollars for clunkers divided by the maximum rebate of $4,500 per car means 666,667 gas guzzlers will be taken off the roads. According to Senators Diane Feinstein and Susan Collins, the mileage difference between the clunkers traded in and the new fuel efficient cars purchased with assistance of these rebates averages 9.6 miles per gallon. If the average car owner drives 12,000 miles per year, the clunker tradeins represent 8 billion miles driven per year. Divide that by the fuel savings of 9.6 mpg and it represents 833,333,333 gallons of motor fuel not pumped every year.
Today's federal motor fuel tax rate is 18.4 cents per gallon. Multiply that number by the 834 million gallons less fuel sold per year, and the annual revenue loss to the federal Highway Trust Fund will equal $153.3 million. That is a loss to the Highway Trust Fund of $920 million over the typical six year reauthorization. Given the fact that not every clunker traded in qualifies for the largest rebate of $4,500, it looks like cash for clunkers actually steals at least $3 billion from the construction industry. Ouch!
Transportation Secretary Ray LaHood is pushing for senate passage of the House "Robin Hood" bill unaltered so cash for clunkers can continue spending the construction industry's cash. Feinstein and Collins both predict the Senate will pass this measure. In the long run, what will happen to the auto industry when there are no roads left to drive on?
The robbery doesn't end with the funds shifting measure, however. Every legislative action this session, it seems, has unintended consequences, and this bill ends up stealing another billion dollars from the construction industry. Three billion dollars for clunkers divided by the maximum rebate of $4,500 per car means 666,667 gas guzzlers will be taken off the roads. According to Senators Diane Feinstein and Susan Collins, the mileage difference between the clunkers traded in and the new fuel efficient cars purchased with assistance of these rebates averages 9.6 miles per gallon. If the average car owner drives 12,000 miles per year, the clunker tradeins represent 8 billion miles driven per year. Divide that by the fuel savings of 9.6 mpg and it represents 833,333,333 gallons of motor fuel not pumped every year.
Today's federal motor fuel tax rate is 18.4 cents per gallon. Multiply that number by the 834 million gallons less fuel sold per year, and the annual revenue loss to the federal Highway Trust Fund will equal $153.3 million. That is a loss to the Highway Trust Fund of $920 million over the typical six year reauthorization. Given the fact that not every clunker traded in qualifies for the largest rebate of $4,500, it looks like cash for clunkers actually steals at least $3 billion from the construction industry. Ouch!
Transportation Secretary Ray LaHood is pushing for senate passage of the House "Robin Hood" bill unaltered so cash for clunkers can continue spending the construction industry's cash. Feinstein and Collins both predict the Senate will pass this measure. In the long run, what will happen to the auto industry when there are no roads left to drive on?
