Administrative cost of Cash for Clunkers – Update

I’m revising this post thanks to Erik’s suggestion in the comments. I read the AP headline “LaHood: Gov’t paid dealers $1.2B for ‘Clunkers'” and assumed that was it; the dealers were going to get $1.2 billion. The article should have been written differently to include the words “so far” somewhere.

So, it’s sloppy blogging on my part, but I’m not a journalist and don’t pretend to be one. That said, the AP article’s headline implies the dealers have already been paid $1.2 billion, and then the first paragraph suggests the $1.22 billion has been approved.

In paragraph two they write 40 percent of dealers payments have been sent out. I figure 40 percent of $2.88 billion (mentioned in paragraph three) is about $1.2 billion, so by my chicken-scratch math it would seem the program cost is $120 million.

It was still a stupid idea and an unconstitutional one at that.

— Original post below —

Is this the federal government’s definition of a widely successful program? In a matter of weeks, the Obama administration and Department of Transportation used up $1.66 billion in administrative costs to manage Cash for Clunkers requests and hand out $1.22 billion to dealers.

Now that’s what you call a fantastic program!

You read the first paragraph correctly. The federal government spent $1.66 billion to hand out $1.22 billion to car dealers during the CARS program. You tell me… who got the $1.66 billion?

From the AP… (The story is so damn short, I’m posting the entire thing)

WASHINGTON – Transportation Secretary Ray LaHood says the government has approved $1.22 billion in reimbursements to car dealers for sales under the Cash for Clunkers program.

LaHood said Thursday the government is on track to pay eligible dealers by a Sept. 30 deadline. More than 40 percent of the applications from dealers have been paid.

The rebates led to more than 690,000 new car sales at a taxpayer cost of $2.88 billion. Auto dealers have said the Obama administration has been slow to pay them for the car incentives, which ended on Aug. 24.

This should be top news everywhere. Malkin just picked it up.

Hot Air brings up the fact that if Cash for Clunkers was a charity organization, the program would be labled a fraud.

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Steve McGough

Steve's a part-time conservative blogger. Steve grew up in Connecticut and has lived in Washington, D.C. and the Bahamas. He resides in Connecticut, where he’s comfortable six months of the year.

1 Comment

  1. Erik Blazynski on September 10, 2009 at 1:17 pm

    no no no, this article is misleading, they have APPROVED $1.22 billion in payments, the approval process, when finished will result in a cost of $2.88 billion to the taxpayers.

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