By KEN THOMAS,Associated Press Writer

WASHINGTON (AP) — The White House said Thursday it was
reviewing what has turned out to be a wildly popular “cash for
clunkers” program amid concerns the $1 billion budget for rebates for
new auto purchases may have been exhausted in only a week.

Transportation
Department officials called lawmakers’ offices earlier Thursday to
alert them of plans to suspend the program as early as Friday. But a
White House official said later the program had not been suspended and
officials there were assessing their options.

The White House
said auto dealers and consumers should have confidence that
transactions under the program that already have taken place would be
honored.

A Transportation Department official said the department
was working with Congress and the White House to keep the program
going. The administration officials spoke on condition of anonymity
because they were not authorized to speak publicly about the
discussions.

The program, called the Car Allowance Rebate System,
known as CARS, offers owners of old cars and trucks $3,500 or $4,500
toward a new, more fuel-efficient vehicle.

Congress last month
approved the program to boost auto sales and remove some inefficient
cars and trucks from the roads. The program kicked off last Friday and
was heavily publicized by car companies and auto dealers

Through
late Wednesday, 22,782 vehicles had been purchased through the program
and nearly $96 million had been spent. But dealers raised concerns
about large backlogs in the processing of the deals in the government
system, prompting the suspension.

A survey of 2,000 dealers by
the National Automobile Dealers Association found about 25,000 deals
had not yet been approved by NHTSA, or nearly 13 trades per store. It
raised concerns that with about 23,000 dealers taking part in the
program, auto dealers may already have surpassed the 250,000 vehicle
sales funded by the $1 billion program.

“There’s a significant
backlog of ‘cash for clunkers’ deals that make us question how much
funding is still available in the program,” said Bailey Wood, a
spokesman for the dealers association.

Alan Helfman, general
manager of River Oaks Chrysler Jeep in Houston, said he was worried
that the government wouldn’t pay for some of the clunker deals his
dealership has signed because they aren’t far enough along in the
process.

His dealership has done paperwork on about 20 sales
under the clunker program, but in some cases the titles haven’t been
obtained yet or the vehicles aren’t yet on his lot.

“There’s no doubt I’m going to get hammered on a deal or two,” Helfman said.

The
clunkers program was set up to boost U.S. auto sales and help
struggling automakers through the worst sales slump in more than a
quarter-century. Sales for the first half of the year were down 35
percent from the same period in 2008, and analysts are predicting only
a modest recovery during the second half of the year.

So far this
year, sales are running under an annual rate of 10 million light
vehicles, but as recently as 2007, automakers sold more than 16 million
cars and light trucks in the United States.

Even before the
suspension, some in Congress were seeking more money for the auto sales
stimulus. Rep. Candice Miller, R-Mich., wrote in a letter to House
leaders on Wednesday requesting additional funding for the program.

“This
is simply the most stimulative $1 billion the federal government has
spent during the entire economic downturn,” Miller said Thursday. “The
federal government must come up with more money, immediately, to keep
this program going.”

Michigan lawmakers planned to meet on Friday to discuss the program.

Brendan
Daly, a spokesman for House Speaker Nancy Pelosi, D-Calif., said they
would work with “the congressional sponsors and the administration to
quickly review the results of the initiative.”

General Motors Co.
spokesman Greg Martin said Thursday the automaker hopes “there’s a will
and way to keep the CARS program going a little bit longer.”

___

AP Auto Writer Tom Krisher in Detroit contributed to this report.


Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.