Consumer group proposes auto-buying stimulus
Posted
Jan 16 2009, 03:06 PM
by
Karen Datko
Rating:
This post comes from partner blog ConsumerAffairs.com.
Congress will consider the incoming Obama administration's request for an $850 billion stimulus package. Within that package, says the Consumer Federation of America, there should be an incentive for Americans to buy new cars.
By including the Accelerated Retirement of Inefficient Vehicles Act of 2009 in the bill, CFA says, not only would Congress help Detroit automakers, but would more quickly replace an aging fleet with more-fuel-efficient vehicles.
"One of the greatest challenges that Congress faces in crafting an economic-stimulus package is to ensure that short-term stimulus spending incorporates good long-term policy. The need to ensure that stimulus and good policy go hand in hand is especially important in areas like energy policy," said Mark Cooper, CFA's director of research.
"In the long term, the U.S. needs to lower its oil consumption and refocus the auto industry on manufacturing more fuel-efficient cars," said Jack Gillis, CFA's director of public affairs and author of "The Ultimate Car Book." "This is exactly what ARIVA does by paying a bounty when gas-guzzlers are traded in and fuel-efficient vehicles are purchased."
To cut gasoline consumption, the bill provides that the government pay a sizable incentive when vehicles that are well below average fuel economy are replaced by vehicles above the fuel-economy standard. The bill provides a formula that would pay consumers from $1,500 to $5,500 for vehicles that get less than 18 miles per gallon when they purchase a new fuel-efficient vehicle.
"In the short term, this program can be implemented quickly, will help stimulate demand for new vehicles and, when fully utilized, save up to 80,000 barrels of oil a day," Gillis said. Because the program is based on fuel-economy jumps from below 18 mpg to above 26, it will have an immediate impact on reducing dependence on foreign oil.
"This is a simple, common-sense program that furthers sound energy policy and the need for stimulus in a sector that is suffering greatly as a result of the current downturn," Cooper said.
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