Harkin proposes income cap on 'cash for clunkers'

By James Q. Lynch

Des Moines Bureau

Sen. Tom Harkin doesn't want taxpayers to help Bill Gates buy a new car.

Harkin has proposed limiting the popular “cash for clunkers” program that gives new car buyers up to $4,500 if they trade in an older, inefficient vehicle.

“Right now, someone making $400,000 a year can get $4,500 to buy a new car, or someone making $2 million a year or Bill Gates can get $4,500 to buy new car,” Harkin said Thursday. “You have to ask ‘Is this a wise way to spend limited amounts of money?'”

Then Senate may vote today to join the House in approving a $2 billion extension of the $1 billion program. The House approved the extension before it adjourned for Congress' summer recess.

Harkin is offering an amendment to cap income eligibility at $50,000 adjusted gross income for individuals and $75,000 for couples. By limiting it to moderate- and low-income people, the government could increase the incentive to $6,500 or $7,500 per vehicle.

“These are the people who need the help. Not someone making 200,000 bucks a year,” Harkin said.

He's not optimistic about his amendment being adopted. “Republicans like the rich people to get their money,” he said, “and Democrats don't want to mess up the bill with an amendment.” The House has adjourned, so unless the Senate concurs with its bill the measure could not be approved until September.

“That would not be a tragedy,” Harkin said.

He's heard reports that dealers have shortages of popular models. But there are plenty of other fuel-efficient, models still available.

“The last time I was rushed to judgment on something like this was last year on TARP,” Harkin said, referring to the Troubled Asset Relief Program that bailed out banks. “I'm not going to get roped into a sky-is-falling scenario again. Not again. I'm not going to get rushed into it.

“Just because the House passed it and went home, OK, now, therefore we can't change it? Nonsense,” he said.

Harkin would like to see the program limited to American-made cars. Now, four out of five cars sold under the program have been built by foreign companies, he said, but he doesn't know how many were built in this country.

Transportation officials, however, say 45 percent of the 184,304 new cars sold were built by the Big Three American automakers and more than half of the others were made in this country.