Cash for Clunkers Gets $2B House Boost

WASHINGTON (TheStreet) -- As car retailers and manufacturers awaited the news, the House of Representatives approved a bill to shore up the so-called "cash-for-clunkers" program just as it was getting started.

The federal program, cleverly titled the Car Allowance Rebate System or CARS, began last Friday offering $3,500 and $4,500 rebates to new car buyers willing to trade in gas guzzlers for more fuel efficient vehicles. It began as both a way to increase auto sales during a time when the industry needs it, and address environmental concerns.

But yesterday, reports circulated that doubted the program's longevity. In its first week of action, car buyers seeking the rebates flooded dealerships around the country. Frazzled dealers reported a significant backlog of transactions, which left government officials worried.

Sen. Debbie Stabenow, D-Mich., said that though 40,000 vehicle transactions had already been put through the system, another 200,000 vehicle transactions were still awaiting completion.

With worries that the $1 billion authorized limit on the program was already tapped out, reports began circulating yesterday that the government was going to suspend the federal program.

But today, the House voted 316-109 to pump an additional $2 billion in federal stimulus money into the program just before the August recess. The Senate is expected to take up the bill next week.

Earlier today, White House press secretary Robert Gibbs said the program would continue through the weekend, though was noncommittal about the days after. "If you were planning on going to buy a car this weekend, using this program, this program continues to run," Gibbs said, according to the Associated Press.