Washington, DC - A new GAO study of the Consumer Assistance to Recycle and Save (CARS) program confirmed that it met key goals of stimulating the economy and improving vehicle fuel economy.
The CARS program, also known as “Cash for Clunkers,” was passed by Congress and signed into law by President Obama in June 2009. The legislation originated in the House Committee on Energy and Commerce, and was adopted by the Committee during the markup of the American Clean Energy and Security Act of 2009 (H.R. 2454).
A December 2009 review of the program by the National Highway Traffic Safety Administration (NHTSA) found that almost 700,000 new cars were purchased or leased under the program, which increased GDP by as much as $6.8 billion, created or saved over 60,000 jobs, and will result in estimated greenhouse gas emissions reductions of nine million metric tons.
The new GAO report, Lessons Learned from Cash for Clunkers Program, confirms the beneficial impacts of the CARS program. GAO reviewed two key program goals: stimulating the economy, and putting more fuel-efficient cars on the road, concluding that “the program achieved these broad objectives.”
The GAO report found that “the program helped stimulate economic activity as measured by [vehicle sales, Gross Domestic Product, and employment],” and that “the CARS program put more fuel efficient vehicles on the road,” with the average fuel economy of new vehicles sold under the program increasing by 59% over traded-in vehicles.
“The CARS program is a classic example of how good environmental policy can also be good economic policy,” said Chairman Henry A. Waxman. “And it shows how Congress and President Obama have worked to get the American economy moving.”
“The CARS program was an overwhelming success in achieving the multiple goals of preserving and creating tens of thousands of jobs in our domestic auto and related industries, helping families and small businesses purchase needed vehicles, and improving our environment,” said Representative Betty Sutton, the primary author of the Cash for Clunkers bill. “The CARS program was about more than just cars. It was about people. It was about our friends and neighbors who depend on auto-related jobs to support their families. And, it was about our communities that depend on auto-related jobs for their tax base to support our schools, police, fire and other city services.”
“The GAO has confirmed what many of us in Congress suspected, namely that Cash for Clunkers would be great for the economy and the environment,” said Chairman Emeritus John D. Dingell. “The program was beneficial to consumers and auto companies at a time of economic duress, but at the same time, it helped move the country to reduce its vehicle fleet emissions and also move another step toward energy independence.”
“This report just confirms what we already knew; that Cash for Clunkers was the ultimate triple play, good for the economy, good for energy independence and good for the environment,” said Representative Ed Markey.
“The positive feedback I received about the Cash for Clunkers program from consumers, car dealers, auto parts suppliers and auto manufacturers across Michigan was further confirmed by this GAO report,” said Representative Bart Stupak. “Cash for Clunkers was a win-win that resulted in cleaner cars on the road and an increase in sales for the struggling auto industry and I was proud to sponsor and vote for this program.”
“The GAO report confirms that Cash for Clunkers helped consumers buy more efficient cars. This saves Americans money at the pump, reduces our country’s consumption of imported oil, while at the same time benefits our economy and the environment,” said Representative Jay Inslee.
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