President Barack Obama and Democratic lawmakers reached agreement on Tuesday on a legislative proposal designed to stimulate U.S. auto sales, which have fallen to near 30-year lows.
The one-year plan crafted by members of the U.S. House of Representatives would offer vouchers worth up to $4,500 for owners to replace their less fuel efficient vehicles for models that get better gas mileage.
The goal of the cash for clunkers legislation is to sell 1 million vehicles.
By stimulating consumer demand for new vehicles, this proposal will directly benefit domestic autoworkers and automotive manufacturers, which have arguably been hardest hit by the current economic downturn, said Rep. John Dingell, a Michigan Democrat and staunch industry ally.
House Majority leader Steny Hoyer has embraced the proposal and said in an interview with Reuters in April that the measure would be acted upon quickly once proposed.
(Reporting by Matt Spetalnick, John Crawley and Rick Cowan; Editing by Richard Chang)