When Congress considers creating a new program, consensus on
broad goals often conceals dissonant agendas. Working out the
details can strain coalitions.
Such has been the case with two end-of-life vehicle
programs, which vary widely, depending on how much importance
is assigned to aiding U.S.-based automakers.
Take the idea of paying owners of aged, polluting cars and
trucks to scrap them and buy environmentally friendlier
replacements. Good for car sales, good for fuel efficiency and
good for shredder activity.
Or take the law mandating a nationwide log of defunct
vehicles that have been taken off the road to become used parts
and scrap. A centralized roster of decommissioned vehicle
identification numbers (VINs) is viewed as making it harder for
bad guys to disguise stolen cars with fake IDs or to resurrect
flooded cars after a hurricane, but the divisive element has
been which players should pay the costs and put out the
The "Cash for Clunkers" idea comes in several congressional
versions. One bill, which has an explicit "Buy American"
element but with gradations to allow for North American
Free-Trade Agreement solidarity, has a three-tier formula for
subsidizing purchases of new passenger cars. To be eligible,
the vehicle must meet the criteria specified in one of the
following three tiers
•?Assembled in the United States and gets 30 miles per
gallon or better? $5,000 to the motorist ditching an older
•?Assembled in Canada or Mexico and gets 30 miles per
gallon or better? $4,000.
•?Assembled in the United States and gets from 27 up to
(not quite) 30 miles per gallon? $4,000.
Other Clunker bills don't discriminate against vehicles from
A different dividing line is whether vouchers for
replacement vehicles might go toward buying used cars which
score high on fuel efficiency.
A company that sells used cars on the Internet lobbied for
its merchandise to be eligible for subsidies under Cash for
Clunkers legislation. "There are tens of thousands of used cars
now sitting on dealer lots that meet the fuel-efficiency
targets in the legislative proposals," according to Car Max
Inc., based in Richmond, Va.
Which Cash for Clunkers version might prevail and whether
the concept will make it through Congress remains to be seen.
In any of its forms, Cash for Clunkers would boost metal intake
at shredders, at least for the first year or so.
Another program still being designed--and promising to
create even greater dissonance among stakeholders--is the
National Motor Vehicle Title Information System (NMVTIS). Until
this year, "national" was a misnomer.
The NMVTIS is "a repository of information on salvage
vehicles, including those vehicles determined to be a total
loss," according to the Justice Department. The agency oversees
the system but doesn't pay for its routine expenses.
What's to dislike about being able to check whether a
suspicious vehicle identification number belongs to a truck
shredded two years ago or to a car that was under water during
Hurricane Katrina and labeled a total loss by its insurer?
Capitol Hill finished mandated the nationwide database in
its Anti-Car Theft Act of 1992. Four years later, Congress
decided the Transportation Department was too slow developing
the program and shifted responsibility to the Justice
Who should pay for the outsourced system, and the size of
the fees to cover its costs, was left unspecified. The result
is a mix of payments from states, data filers and data
On a voluntary basis, the NMVTIS has been pooling and
updating information from 27 state governments, some insurers
and a car dismantling chain, LKQ Corp. As the 50-state version
gets started, the plan is for several competing contractors to
funnel data from dismantlers, shredders and others to the
NMVTIS, collecting fees from both respondents and data
The Justice Department, faced with a court order, finally
issued the program's regulations in January 2009, as required
under the 1992 law.
Operating the central database, at least for now, is the
American Association of Motor Vehicle Administrators, an
association of state (and Canadian provincial) officials. The
group has said it might give notice in August that it will exit
Designing the data intake fields and procedures was assigned
to the National Salvage Vehicle Reporting Program, a non-profit
consultancy. Howard Nusbaum is the group's unsalaried
administrator, remaining on the payroll of his employer,
Gregg Marcucci, the vehicle acquisitions manager of SA
Recycling LLC, said recently that all the data he has begun
reporting electronically to NMVTIS he also has provided for
many years in hard copy format to the state of California,
which converts it to digital. For the NMVTIS, "they're telling
us we have to report it again and now we have to pay for it, to
boot," he said.
Scrap industry leaders say they would have lobbied
intensively against filer fees during the rulemaking had they
not been assured by the Justice Department that such fees
"At this time, (the Justice Department) is not in favor (of
filer fees) because of the increased financial burden it would
place on junk and salvage yards and insurance carriers and the
disincentive it would impose on their reporting of data," the
Justice Department said in January in the actual rulemaking
But the fees happened anyway.