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Making Supplemental Appropriations For The Fiscal Year 2009 For The Consumer Assistance To Recycle And Save Program

Floor Speech

By:
Date:
Location: Washington, DC

BREAK IN TRANSCRIPT

Mr. COBURN. Madam President, it is interesting to note what we just heard from the Senator from Michigan about how we can't fix this program--admitting that there are several things wrong with it--because the House is out of town and we have to pass it. So we are going to do the wrong thing for the right reason.

I have not heard from a dealer in my State that is not for this program. There is no question it is stimulatory. There is no question, however, that the stimulation is one based on time of sales, not on true total stimulation to our economy. What we are doing is stimulating future sales to be bought at this time. But, more importantly, we have two untoward disadvantages that this program is causing which is actually hurting the poorest and the weakest and those of color in this country.

When we wrote this amendment, we went to the Finance Committee. We were told it was not going to score. Then when we got to the Joint Economic Committee, they scored this amendment as costing $90 million, but what they did not take into consideration is that if these cars were actually given to charities or to people who did not have a car, it scored exactly the same. In essence, there is no net score with the bill.

The fact is, with this program--because we are destroying half a billion dollars worth of real assets so far in this program and we are going to destroy $1.2 to $1.3 billion worth of real assets, real cars that charities could really use to give to real people who do not have transportation--we are taking that away. In our tough economic times right now, charities' income is down about 30 percent across the board while the demands on the charitable organizations are up. We all recognize that charities use the contributions of automobiles to then turn around to sell and fund a lot of charities.

What this amendment does is allow the vehicles that are traded in to be donated to poor families or to charities. Why destroy a perfectly good car that somebody in a rural area who cannot get access to health care now because they don't have transportation--why destroy that mechanism of opportunity?

I understand there probably will not be the votes for this amendment. But to say we are going to take a perfectly good automobile that somebody less fortunate could utilize for years for transportation purposes, that will elevate them economically, and instead we are going to destroy it, we are going to destroy the opportunity for somebody less fortunate to have that automobile. This program is working for two groups of people: it is working for the auto industry and their dealers, and it is working for anybody who qualifies and uses the Cash for Clunkers Program. But it is not working for everybody else. This is a small minority of Americans who are going to benefit for a specific industry.

I heard the Senator from Arizona raise the question: Why not golf clubs? Why not dishwashers? Why not washing machines? Why not boats? Why not RVs? Why not other industries that also were on their backs, not having the same benefit?

I also would note that several organizations, a couple from which we received endorsements--the Military Order of the Purple Heart and Lutheran Charities throughout America endorse it.

I thought I would raise one other point; that is, this amendment is significantly environmentally friendly. A recent ABC News story on the clunkers quoted the following:

Believe it or not, even some environmentalists are against the new law. They point out it will end the lives of perfectly serviceable vehicles with years of life left. One way to be green is to get a more carbon friendly car. Another way to be green is to recycle or buy a used car. It takes 113 billion Btus to build a Toyota Prius. You have to drive that car 46,000 miles before you are even on the carbon footprint.

If you take the same car and give that car to somebody in need, you enhance their economic condition and you do not create another 113 billion Btus of energy.

Hybrids get great mileage, we talked about that, but in terms of net-net, in terms of being green--we hear that all the time. If we want to do what is most efficient from an environmentally safe standpoint, this amendment does it. You still have the Cash for Clunkers Program, but what you do is turn around and use the cars by giving them to charitable organizations or families who need them. If we were to do that, especially if we are going to increase this program $2 billion additionally, you are going to save $1 billion worth of net assets that we can transfer to those less fortunate in this country. For that, the tax consequences will be $90 million, which is exactly the same tax consequences we would have had on these cars had we not had a cash for clunkers program.

It is crazy, in this country, to intentionally destroy perfectly good automobiles. It is nuts. It is not rational. Yet we have a program and we are already doing it. In Oklahoma we had a car that was traded in that had 10,000 miles on it. They destroyed the engine on the car under this program. Granted, it had poor gas mileage, but that was transportation to somebody who was poor, transportation to somebody who did not have transportation.

We have been debating health care around here for 6 months. The biggest limitation on access to health care in rural and poor communities is transportation, and we are going to take away an opportunity to give many of those people transportation. We are going to take it away. The schizophrenia of Washington continues to amaze me, and the lack of common sense that is associated with what we do.

I will make one final note. The reason this bill has problems, the reason the Transportation Department is having trouble with it is it never went through a committee, never had multiple hearings, had not had an oversight on what we were going to do, and it was done in such a short period of time that we did not even allow the Transportation Department an effective amount of time to set it up so it would be effective and not wasteful.

If you hear any complaints from the dealers, it is they don't know where they stand on whether they are going to get paid. They have no clue right now because even though they filed paperwork, getting that money to them--what we are seeing is a lot of problems with unhappy customers right now at the dealers because the Transportation Department cannot be efficient in administering this program.

I conclude by noting that if this is the standard under which we are going to reenergize our economy, then we ought to apply the same standard to every other industry. If we do, we will not be bankrupt in 11 years, we are going to be bankrupt next year.

I want our auto companies to succeed. There is no question there are stimulatory benefits to what we are doing, but it is at a great cost. As the Senator from New Hampshire noted, the net-net cost is $45,000 per net car that would not have been traded in. It is foolhardy.

I hope Members of the body will consider this amendment. I know they have been instructed to not consider it.

I will reserve the remainder of my time.

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Mr. COBURN. Madam President, I could be a whole lot more comfortable with this bill if you told me there was not another one coming in a month. But the fact is, what we are doing is buying forward sales. Every economist says that. Eighty percent of the sales that come in under cash for clunkers--we are just moving up sales that were going to be there anyway. There is nothing wrong with that as long as we say there comes a point in time we are not going to do that.

I wonder if my distinguished colleague from Michigan would commit to the body that we are not going to see another one of these bills in 2 months, 3 months, 4 months, or 5 months, we are going to subsidize the purchase of automobiles by stealing from our children in this country--

regardless of the economic benefit for one particular industry. Is there an answer to that question? The fact that there is not an answer to the question means it is not going to stop with this one. As soon as this next program stops, and as soon as we run through the money, the sales are going to go right back down.

Then our option is going to be: Well, we have to do another one and another one because we are buying forward sales.

What we need is the health of the economy. I do not deny we need to inject the proper amount of fiscal stimulus, true fiscal stimulus, not a government transfer payment, which is 60 percent of the stimulus bill that was passed, but it is an interesting question: When does it stop?

If we are going to do it for automobiles, and let's say automobiles get healthy but the appliance industry does not, are we going to do it for the appliance industry? How much more can we afford to borrow from our kids? Those are legitimate questions that need to be addressed.

I understand the depth and breadth of the difficulties the States in the upper Midwest are feeling from this recession and especially the impact on the automobile companies. I want to be cooperative. I want to see them come out.

But it would certainly give us much less indigestion if we knew there was truly going to be an end and not another of these Cash for Clunkers Programs when the sales dribble right back down because all we did was stimulate forward sales into this sales period.

With that, I reserve the reminder of my time.

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Mr. COBURN. Is it not true that the average plants were down for 10 weeks?

Mr. LEVIN. I do not know the number.

Mr. COBURN. Maybe 10 weeks. I know Chrysler was down longer than that. The fact is, when I drive by the auto dealers, and when I check the statistics with NHTSA, inventories are low.

So we are going to put $2 billion back out, when inventories are at half the level on the car lots of what they normally are. So if, in fact, you pass this, you might ought to spread it out over a period of time so the factories can get the cars to the dealers because that is a significant worrisome part on a lot of my dealers--that if you bring it back now, and you bring it back, we are not going to have the cars to sell them.

I did make a note before, I say to the chairman. He is my chairman. I get along with him great. I have great admiration for him. I am glad Oklahoma does not have any car manufacturing plants right now. I can tell you that. But I did make a point that it takes 153 billion BTUs to make a Toyota Prius. You have to drive that car, on average, 2 years before you are ever at break-even.

So if you take a used car--and this program does not apply to used cars, right? It applies only to new cars. If you take a used car and compare it to a car of similar size, you are at least 2 1/2 years before you ever get the first benefit, in terms of green, 2 1/2 years.

So we may see a difference in those, but in terms of BTUs consumed, it is 2 1/2 years before you see the first change in terms of carbon footprint under this program. Ultimately, I would admit to you there is a carbon benefit to it.

Mr. LEVIN. In response to the Senator, I think that same point is true with the purchase of any new car.

Mr. COBURN. Yes, it is true.

Mr. LEVIN. But the faster we get the more fuel-efficient cars, the better environmental impact we are going to have, even though there is that time period, obviously, when there is a carbon footprint that results from the production of the new car.

But you get to that 2 1/2 years faster then if you buy that new car now than if you buy it a year from now or 2 years from now.

Mr. COBURN. Well, 2 years from now, it is going to have 4 or 5 miles better mileage.

Mr. LEVIN. It may. We do not know that.

Mr. COBURN. I yield back the remainder of my time.

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Mr. COBURN. Madam President, this is a simple amendment. Rather than throw great cars away, give them to poor people. One of the biggest problems we have with rural health care and health care associated with our citizens of color in this country is the fact that they do not have transportation to get their health care.

Under this bill, already we will destroy $500 million worth of good automobiles. As we pass this bill we are going to destroy another $1 billion worth of automobiles.

It would seem to me, since the charitable organizations are so good at utilizing these cars and we have such a need, especially with the economic downturn we have, that we ought not be throwing them away and ruining them. What we ought to be doing is giving them to those who have greater need than those who are turning them back.

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