Cows, clunkers and the courts capture these last hot days of the Senate’s summer session with both parties working now toward the goal of completing final votes by Thursday night and following the House home.
A 60-37 roll call late Tuesday set the tone as an unlikely combination of bipartisan rural farm interests, and New York Democratic Sen. Chuck Schumer corralled just enough support to waive budget rules and provide $350 million to help struggling dairy farmers.
Automakers are betting that $2 billion will soon follow in support of the popular “cash-for-clunkers” rebate program now predicted to generate 200,000 truck and auto sales by the end of this week. Rounding out the picture will be the history-making confirmation of U.S. Supreme Court nominee, Judge Sonia Sotomayor, who grew up in a South Bronx world of gritty, numbered train lines — far from cows or polished new cars, for that matter.
Democrats stopped all Senate business for two hours Wednesday as they held a lengthy caucus on the health care reform battle that still looms ahead this fall. But both the dairy vote Tuesday and the clunker debate expected Thursday underscore how much the economy remains a central worry for the majority party.
“The message of [Tuesday] was we have a major crisis,” Sen. Bernie Sanders, the Vermont independent, told POLITICO. “The point is we have to stand together and fight our way out of this recession.”
“This is not Ph.D. political science here,” Sanders said. “Not every state has an economy that is significantly dependent on the dairy industry. But I don’t have any auto manufacturers, any Ford plants, in Vermont. If you see the collapse of the auto industry, you have to be sensitive, and in the same sense, people want to save family-based agriculture in this country.”
Schumer, a brash New Yorker with upstate dairy farmers of his own, helped to turn two Virginia Democrats, Sens. Mark Warner and Jim Webb, whom he had helped elect during his tenure at the Democratic Senatorial Campaign Committee. And for all the talk of cost containment in health care, five senators in the bipartisan Group of Six or G-6 negotiations — including Senate Budget Committee Chairman Kent Conrad (D-N.D.) — backed more spending to help the dairy industry.
Allies of the “cash for clunkers” initiative are betting that the same sentiment will prevail in their favor Thursday, when the Senate takes up a House-passed bill providing an additional $2 billion for the clunker program.
“I don’t see any bandwagon building against this,” Transportation Secretary Ray LaHood told POLITICO. And he predicts a combination of factors — including the fact that automakers are beginning to run out of some of the more popular vehicles — means the added money will carry the program through Labor Day.
“The program will end when we’re out of money,” LaHood said, suggesting that something of a breather will follow, giving time for Congress to take stock of what the effect has been. Thus far, the statistics compiled by his department show the Big Three American automakers are holding their own in terms of market share of new vehicles purchased, and the overall improvement in gasoline mileage continued to be larger than required to qualify for the rebates worth between $3,500 and $4,500.
The average new vehicle purchased will consume 25.3 miles per gallon, an improvement of 9.6 miles per gallon or 61 percent when compared with those traded in, the department estimated Wednesday. This was based on data now covering more than 184,000 transactions with a dollar volume of $775.2 million. And LaHood said he is more confident now that the major glitches have been worked out of the system for administering the rebates and tracking the vehicle data.
“We set off such a large alarm because the House was going home last Friday and we were going to be in real trouble,” the secretary said of the hubbub last week. But he predicted less “hysteria” in September and promised he won’t be waiting at the Capitol door seeking another infusion of funds.
Instead, he expects to submit a more detailed report then to lawmakers on what the experience has been and also allow for consultation with automakers before Congress decides whether to go forward with another extension.
The market data could be important to this debate. Data released Wednesday show that Ford, General Motors and Chrysler account for 45 percent of the sales, and of the non-Big Three purchases, the department estimates that more than half of these new vehicles were manufactured at plants in the U.S.
Nonetheless, a comparison of the new vehicles bought and those traded in is striking. All of the top 10 trade-in vehicles appear to be produced by American companies. By comparison of the top 10 new vehicles purchased, only four are made by the Big Three, while Toyota alone accounts for three of the top five.
In both cases, cows and clunkers, the Democrats’ penchant for intervention also has to be measured against signs of markets improving.
This may explain LaHood’s suggestion of taking some time after Labor Day to study the results of the clunker program. And Dana Brooks, senior director for government relations for the National Milk Producers Federation, said her hope is that dairy prices will rebound enough this fall that the added $350 million in the Sanders amendment won’t be needed.
Farmers have been caught in a historic drop in prices owed to excess production and a collapse in exports because of the world economic downturn. The industry is taking steps to scale back herds and to provide some relief, the Agriculture Department announced steps last week to pay more for dairy products, such as nonfat dry milk and cheese blocks, to increase farm revenues.
These temporary measures are expected to cost $243 million, and Sanders, who spoke to Agriculture Secretary Tom Vilsack on Wednesday, wants the additional $350 million to raise the prices still further. “Eight exclamation marks no,” he said when asked if the appropriations were to help pay for the cost of what Vilsack has already committed.
But Brooks of the Milk Producers, who supported Sanders, said there are signs of improvement that may not make the extra expenditure needed.
Watching it all with some wonder is Sen. John McCain, who lost last year’s presidential election. The Arizona Republicans opposed the dairy assistance and will oppose the added $2 billion for the clunker program, as well.
“It is a far more liberal approach to fiscal discipline,” he told POLITICO with a sigh. “Far more.”