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Update: House Approves Fresh ‘Cash For Clunkers’ Money

Junk cars are seen stacked at Deal Auto Wrecking July 31, 2009 in Richmond, C...

Photo by Justin Sullivan / Getty Images

Above: Junk cars are seen stacked at Deal Auto Wrecking July 31, 2009 in Richmond, California. Federal lawmakers are seeking an additional $2 billion to keep the popular 'Cash For Clunkers' program going after the initial $1 billion in funding ran out after a week.

With the government's "cash for clunkers" program overwhelmed by demand and out of money, the House passed legislation Friday pouring an addtional $2 billion into the program.

The bill was approved on a vote of 316-109. House members acted within hours of learning from Transportation Secretary Ray LaHood that the program was running out of money.

Rep. Sander Levin (D-MI) revealed a plan to add the money after he and other lawmakers were assured by LaHood that the program would continue at least through Friday while the Obama administration looked for more money.

Democrats in both the House and Senate were exploring the possibility of votes as early as Friday to replenish the funding.

Republicans argued that Democrats were trying to jam the legislation through. Some lawmakers also complained that many dealers were left to contend with a chaotic government-run program.

The Senate was not scheduled to vote on Friday but lawmakers hoped to win approval for additional funding next week.

At the White House, press secretary Robert Gibbs sought to assure consumers that the program is still running and will be alive "this weekend."

"If you were planning on going to buy a car this weekend, using this program, this program continues to run," Gibbs told reporters. He would not commit to any time frame beyond that.

But Gibbs said administration officials and bipartisan leaders of Congress were working Friday morning "to find and develop ways to continue to fund this program." Sen. Carl Levin (D-MI) said it wasn't clear when a Senate vote would be held.

"Cash for clunkers" offered the owners of old cars and trucks up to $4,500 if they traded in their old car for a new, more fuel-efficient one. The clunker had to get 18 miles per gallon or less. The program only started a week ago, but car dealers across the country saw an immediate rush.

"The atmosphere around the dealers just reminds me of, you know, 10 years ago, when people were just flocking in to buy cars especially in Silicon Valley," says David Horn, the general manager of Boardwalk Volkswagen in Redwood City, Calif.

However, Horn and many other dealers have put the program on hold after news that the program was out of money

According to Charles Cyrill of the National Automobile Dealers Association, many dealers are worried that they might not be able to get their reimbursements. They says there is a paperwork backlog in Washington. Still, they would like more money for the program, which has been a boon for car sales.

"The timing of the "cash for clunkers" program could not have happened at a better time," Cyrill says.

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