news House leader Hoyer embraces auto incentives

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House leader Hoyer embraces auto incentives



1 hour, 52 minutes ago





By Richard Cowan


WASHINGTON (Reuters) - Legislation aimed at invigorating automobile sales in the midst of a deep economic recession is likely to be debated by the U.S. House of Representatives in coming weeks, House Majority Leader Steny Hoyer said on Thursday.

"We could consider it when we come back" from a two-week recess that is set to begin on Saturday, the Democratic leader told Reuters in a telephone interview.

A proposal for consumer vouchers could help jump-start sales at hard-hit automobile companies like General Motors Corp, Ford Motor Co and Chrysler LLC, Hoyer said. U.S. auto sales are near 30-year lows and GM is facing possible bankruptcy despite billions of dollars in federal aid.

Hoyer -- who supports the "cash for clunkers" idea that aims to get older, less fuel efficient automobiles off the road and help consumers replace them with new, more fuel-efficient cars -- also said that "foreign autos are going to have to qualify" under the legislation.

Hoyer called the initiative "a good idea that the (Obama) administration supports" and added that it would both "help the environment and create jobs."

There are varying ways of accomplishing the cash for clunker program. Hoyer said the House could pass legislation providing a tax credit to encourage consumers to get rid of cars that are at least 10 years old. Or, he said, there could be a "straight voucher to consumers to get them money to purchase a new car."

Some proposals would offer a voucher worth up to $5,000 to consumers.

Elaborating on the need to include foreign autos in the government incentives, Hoyer said "American workers are building those autos." Japanese-owned Honda Motor Co and Toyota Motor Corp , for example, have auto assembly plants in the United States.

U.S. automobile dealers also are lobbying the Obama administration to expand access to Small Business Administration lending programs to help the industry.

More than 1,000 dealers have closed this year, costing the recession-hit economy 50,000 jobs.

Depending on how legislation is written, the cash for clunkers proposal could cost the government about $2 billion a year and could help sell 500,000 to 1 million cars per year, according to Representative Steve Israel, who has written one bill.

(Editing by Dave Zimmerman)