"Cash for Clunkers" Cost Billions More than Advertised, Taxpayer Group FindsFor Immediate Release August 25, 2009Pete Sepp
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(Alexandria, Va.) -- The true cost to taxpayers of the federal "Cash for Clunkers" program has soared billions above its supposed price tag, charged the 362,000-member National Taxpayers Union (NTU) on the day following the program's conclusion. NTU Vice President for Policy and Communications Pete Sepp offered the following statement about the program:
The Obama Administration is touting the Cash for Clunkers program as 'wildly successful' -- but its cost has been understated by billions of dollars. In fact, while taxpayers shelled out $3,500 to $4,500 per car directly, they were also forced to prop up both General Motors and Chrysler. Given that GM's tab alone was $50.2 billion, the true cost of the Cash for Clunkers program is far higher than its advertised $3 billion sticker price.
Last December, Congress wisely chose not to act on legislation initiating a federal bailout of the auto industry. Nevertheless, the Bush Administration and now the Obama Administration -- without any legislative authority to do so -- provided General Motors and Chrysler with billions of dollars from the $700 billion Troubled Asset Relief Program (TARP). Congress authorized TARP for buying assets from financial institutions, not automobile companies.
With no vote of Congress, not a single public hearing on the final deal, and closed-door meetings conducted largely by Obama Administration officials who were never subject to Senate confirmation, the federal government now owns 60 percent of one of the world's largest multi-national corporations -- and American taxpayers will be left holding the bill for years.
The move not only provides huge potential liabilities and problems for the government, including the likely infusion of more capital in the future, but it also opens the door to micro-management of General Motors by federal officials and Members of Congress.
The Cash for Clunkers program is just one more example of why taxpayers should never be put at risk to guarantee the bottom lines of failing companies. At a time when they could least afford it, taxpayers were gouged twice for every vehicle someone else bought: once to underwrite the subsidies, and once to underwrite bankrupt automakers.
NTU is a nonpartisan, nonprofit citizen organization founded in 1969 to work for lower taxes, smaller government, accountability from public officials, and economic freedom at all levels. In 2008 and 2009, the group actively opposed both the automaker bailout and the "Cash for Clunkers" schemes, by mobilizing its members in email alerts, conducting talk radio interviews, issuing vote alerts to lawmakers, and lobbying Congressional staff face-to-face. Note: For further information, visit www.ntu.org.