'Cash for guzzlers' compromise praised

House bill offers up to $4,500 to trade in fuel-thirsty autos

Gordon Trowbridge / Detroit News Washington Bureau

Washington -- A compromise by House Democrats on "cash for guzzlers" legislation to boost auto sales won praise from Michigan lawmakers and the domestic carmakers Tuesday.

But, the legislation leaves out "buy-American" incentives Michigan officials had sought and could become entangled in the contentious debate over climate change legislation. Michigan lawmakers of both parties said they hoped the House would consider the measure separately from a climate-change bill, which may not come to a vote for months.

The agreement, announced at the White House after House Democrats met with President Barack Obama, would offer up to $4,500 to consumers if they trade in a gas-guzzling vehicle for one with better mileage. The language follows that of a proposal supported by environment-minded lawmakers who saw the measure primarily as a way to improve fuel efficiency.

They had been in discussions for weeks with auto-state lawmakers who backed a competing proposal, which focused more on boosting sales for domestic carmakers.

It may be a while before buyers can make their trade-ins. Rep. Henry Waxman, D-Calif., chairman of the House Energy & Commerce Committee, intends to include the language in a broader bill addressing climate change, including a controversial "cap and trade" plan to limit carbon emissions. Republicans are likely to oppose that climate change legislation, and many Democrats, including several from Michigan, have questioned parts of the idea.

"We haven't given up" on separating the measure from climate change, said Rep. Bart Stupak, D-Menominee. "The important part is we have a deal."

Rep. Fred Upton, R-St. Joseph, said waiting until the climate legislation passes could come too late for automakers battered by falling sales. He said lawmakers could seek to include the measure in a supplemental spending bill the House will consider next week.

"We have bipartisan agreement," said Rep. Sander Levin, D-Royal Oak. "Now there needs to be early bipartisan action."

Still, Ford Motor Co., General Motors Corp. and Chrysler LLC issued statements praising the compromise, as did the United Auto Workers and Michigan lawmakers. Rep. Candice Miller, R-Harrison Township, who introduced the auto-states proposal along with Ohio Democrat Betty Sutton, who called Tuesday's announcement "an important step forward."

"This isn't exactly what Betty Sutton and I originally went for," Miller said. "But: compromise, compromise."

She and the automakers said time was of the essence.

"A program like this is needed now -- a point that was reinforced by April's auto sales reported last Friday," Ford's top government relations official, Ziad Ojakli, said in a written statement.

U.S. auto sales fell 34.4 percent last month, according to Autodata Corp.

Rep. John Dingell, D-Dearborn, said the agreement "could not have come at a more opportune time."

"By stimulating consumer demand for new vehicles, this proposal will directly benefit domestic autoworkers and automotive manufacturers, which have arguably been hardest hit by the current economic downturn," Dingell said in a prepared statement.

Added Michigan Sen. Debbie Stabenow, D-Lansing: "I'm very pleased that we have reached an agreement on fleet modernization legislation after weeks of work with the House, the Senate and the administration."

"As a result of the agreement, this week I will be introducing a bi-partisan fleet modernization bill with Sen. Sam Brownback and other colleagues," she said in remarks issued by her office.

"Soon, I hope we will have a bill on the president's desk that will bring people back into showrooms, sell new cars and trucks and save jobs in Michigan. Today's announcement moves us toward the goal of taking less-efficient cars off the road and giving a boost to our economy at a time when it desperately needs one.

Waxman has said he hopes to have a committee vote on a climate bill before Memorial Day. But there are concerns among some House Democrats that carbon limits could disproportionately harm Midwestern states. Passage is more doubtful in the Senate, where just a handful of Democratic defections could doom a cap and trade program.

Supporters of the cash-for-clunkers idea point to the success of similar programs in other countries in boosting auto sales. The situation in the United States is dire: Through April, total sales were at an annual rate of about 9 million, far below pre-recession figures, with most automakers reporting declines of 20 to 40 percent from a year ago.