A clunker lesson

While the debate over a public option for health insurance has raged, one new government program has scored big points with both consumers and private businesses.

Until now.

Cash for clunkers is the federal program that provides up to $4,500 in federal money if people trade in older, less fuel-efficient vehicles for new, higher-gas-mileage ones.

Auto dealers were solidly behind the plan when Congress passed it. Consumers showed their support by cruising to dealers in higher-than-anticipated numbers in late July and early August to take advantage of the rebates.

But the program has been stalling of late. And the Obama administration announced Thursday it would halt it as of Monday, even though it was scheduled to run into September and there is reportedly $1 billion left of the money Congress approved for it.

Much of the reason for the stall was the ineptness of the Department of Transportation, the federal agency that is supposed to repay dealers who offer the rebates.

Many dealers have yet to be reimbursed for cash-for-clunker deals last month and they’re reluctant to make new sales.

The National Automobile Dealers Association said Wednesday the government should suspend the program now and reimburse dealers for sales already made, and Obama apparently listened.

Hundreds of New York area dealers have already withdrawn from the program, saying they’ve only been reimbursed for about 2 percent of their sales and it has become a bureaucratic mess.

The Transportation Department says it is doing all it can to process the rebate reimbursements, even hiring additional people. Still, as little as 2 percent of sales have been reimbursed.

This is a government program that had bipartisan support and the backing of businesses and consumers. But it’s been rapidly losing support and is ending early because the federal agency assigned to run it can’t do so in a timely and efficient manner.

Is it any wonder many people are wary of a far more complicated government option for health insurance?


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