American Morning
Cash for Clunkers may be put on hold
The federal government is considering whether to put the $1 billion Cash for Clunkers program on hiatus until it can sort out how much has been spent.
NEW YORK (CNNMoney.com) - The federal government may suspend its $1 billion Cash for Clunkers program after less than a week over concerns that the plan may have already burned through its funds, according to congressional sources.
A White House official said the Obama administration is assessing the situation, but added that "auto dealers and consumers should have confidence that all valid ... transactions that have taken place to-date will be honored."
The Department of Transportation, which runs the program, wants to sort out how much of the plan's funds it has already committed.
Cash for Clunkers officially launched less than a week ago.
It is set to end on Nov. 1, or whenever its $1 billion budget has been depleted.
Under the plan, vehicles purchased after July 1 will be eligible for refund vouchers worth $3,500 to $4,500 on traded-in gas guzzlers. The trade-in vehicle has to get combined city and highway fuel economy ratings of 18 miles per gallon or less.
The program, created by Congress to spur sales and help the struggling auto industry, is intended to take low-mileage cars off the road and spur new car sales for U.S. automakers.
"With this program, we are giving the auto industry a shot in the arm and struggling consumers can get rid of their gas-guzzlers and buy a more reliable, fuel-efficient vehicle," Transportation Secretary Ray LaHood said in a statement Monday.
Commentary: Maine's lobstermen are not making enough money to survive
[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/07/27/maine.lobster.art.jpg
caption="Some of the 32,000 lbs of Maine lobster served during the Port Of Los Angeles Lobster Festival sits October 05, 2001 in San Pedro, CA."]
After spending three days in Maine with lobster fishermen Mike Davis, Ryan Sheehan and Chris Andrews one thing is clear; these guys love their job. Awaking at 4:00am to meet them down on the docks in torrential rain, we pulled up and were greeted with smiling faces excited to get on the water. We all boarded the boat and huddled in the main cabin trying desperately to stay dry in the horrible conditions. As we motored our way out of Portland harbor, Mike was telling us about how he can’t imagine doing anything else, “Today might be a little different story, but when you wake up and it’s a beautiful, calm, sunny morning I can’t imagine not going out and hauling traps.”
As we approached the first buoys I ventured out onto the back deck where Ryan was prepping to haul up the traps. Standing next to the bait, which were huge drums of dead fish, Ryan could not tell me enough about how much he loved hauling traps. This is his first season back fishing; he was a plumber for 3 years until he got laid off last fall. He now views losing his plumbing job as a blessing in disguise as he told me he was miserable as a plumber.
Despite passion for their work, the lobstermen say they are just not making enough money to survive. Chris Andrews told me they need to be getting about 3 dollars a pound for their catch in order to turn a profit. The day we were on the boat, the price was approximately $2.60 a pound for lobster. When I asked Chris how they pay their bills he told me they either have to dip into their savings or use credit cards. As a result, some lobstermen have resorted to selling lobsters directly to customers on the side of the road or out of their houses in order to make ends meet. Lobster fishermen traditionally have sold to lobster dealers for a boat price who then distribute the lobsters for a higher price to consumers. When lobstermen sell directly to customers they are able to get more for their lobsters than if they sold to dealers.
Commentary: Expensive gas will "change our lives for the better"
[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/07/27/am.intv.steiner.art.jpg caption="Steiner says today's cheap fill ups aren't going to last."]
Last summer, people parked their cars and decided to get rid of their SUVs. They walked, they biked and they car-pooled because gas soared to four bucks a gallon nationwide. A lot of people are wondering how high it will go. Now AAA says the national average is $2.50 today.
Christopher Steiner is a senior staff reporter at Forbes and wrote the book ‘$20 per gallon’ about the inevitable rise in gas and how it’s going to change our lives for the better. He spoke with CNN’s Kiran Chetry Monday.
Kiran Chetry: How do you convince people to worry about the price of gasoline when it's relatively low? It was $4 last year and now on average it’s $2.50 a gallon
Christopher Steiner: Well some people you can't convince to worry. As economies recover across the world and we get these 2 billion people that are going enter the global middle class for the next 30 years, right now there’s only a billion around the globe. The price of oil will go up, it's inevitable.
Chetry: You talk about the growing middle class in China and India. How are they going to affect the world as we know it in terms of gasoline usage?
Steiner: Those people want to live the same types of lives we already have. China just passed the United States as the largest car market in the world during the first half of 2009. That's an amazing thing. If someone had told you that was going to happen ten years ago, you would have thought they were nuts.
Chetry: Another interesting thing that you wrote about in your book, when we talk about how gas is a natural resource, it’s not an infinite resource. For every six gallons of gas we use we only take one out of the ground.
Steiner: For every six barrels we use we only find one. So we're using at a much greater rate than we're finding because we found most of the good oil.
Chetry: Also the process it takes for us to get gasoline now is much harder. So how does it translate to the person at home who’s driving an SUV, who wants to be able to drive what they want and is paying $2.50 a gallon right now?
Steiner: It's hard to force people to change when life is so easy at $2.50. What you're going to see is people aren't going to change their lives until they have a reason to and that reason is the price of gas. When people think about tomorrow, if they got up and the price of gas was three times as much, would they drive as far to go to work? Would they be willing to drive their kids as far? Would they be willing to live in the same town as they live in now? The answer for a lot of people is no.
Chetry: You talk about the psychological tipping point at $6 a gallon. When do you think that we will see $6 a gallon?
St. Cloud Mayor Stormy over stimulus
Four months ago, Vice President Joe Biden took a stimulus road trip to St. Cloud, Minnesota to tout the prospects of recovery program jobs. Now the Mayor of St. Cloud, Dave Kleis, is one of the nation's most outspoken stimulus critics.
At the event, U.S. Transportation Secretary Ray LaHood said cities like St. Cloud should expect to see stimulus jobs as early as last spring.
Kleis says he's still waiting for those jobs as he hasn't heard back from the Obama administration to approve nearly a dozen stimulus requests for his town.
But we did a little digging and found some stimulus jobs are coming to St. Cloud. The local sign-making company, Geyer Signal, has hired 25 workers. They make the Recovery Act highway signs that are popping up on interstates around the country.
And the St. Cloud Airport has received funding for a new jet bridge, even though the facility sees only three commercial flights a day.
St. Cloud has weathered the recession well. Thanks to state road construction projects, already underway downtown, the city has an unemployment rate of 7.7 percent. That's far below the national average.
Not good enough for Mayor Kleis who says his city hasn't gotten its fair share of the stimulus.
Deals to be found at government garage sales
[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2009/images/07/21/cho.state.auction.cnn.art.jpg caption="Cartons and shelves of surplus goods up for sale at government auctions online."]
We drove past a heavily fortified prison and psychiatric ward while heading to our destination – New Jersey's Distribution Center located in the capital of Trenton.
It's the hub from where supplies (like boxes of printer paper) are shipped across the state. Long tractor trailers move in and out of the large warehouse on a daily basis.
But once a month, that warehouse becomes a money making hot spot for the state – the Government Vehicle Auction. You can bid on anything from former police cars to seized vehicles, Chevy Suburbans to Dodge Stratuses.
Jacob Olearchik, who runs the vehicle sale lot, said the state is putting more items on the auction block, and people are coming to find deals.
“This car right here,” said Olearchik as he pointed to a green Ford Escort, “if you go to a used car lot, they'll put a $4,000 price tag on that car, maybe a $3,500 price tag on that car. Right now you can buy that car here tomorrow for $1,800 or maybe less.”
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