Clifford Winston, a senior fellow in the Brookings Institution's economic studies program, argues Cash for Clunkers was a "classic example of unintended consequences" and a mistake that should not be repeated.
New-vehicle sales from the program mostly were pulled ahead from transactions that eventually would have occurred even without the stimulus, and mostly by high-income earners, Winston added.
"It didn't accomplish any of its intended goals. There was no increase in employment or output. There was very little effect on air quality," he said. "Overall, it turned out just to be a windfall for certain … consumers who would have gotten cars anyway."
LaHood believes Congress should develop a new program that offers rebates to consumers and auto dealers, using lessons learned from the Cash for Clunkers program.
"A rebate program would motivate people to get them into the showroom — either virtually or by appointment," he explained. "This would jump-start the car industry in a very similar way that our program did."
U.S. Rep. Debbie Dingell said any sort of Cash for Clunkers 2.0 or government stimulus package that emerges should have a new name because the auto industry has different needs this time.
"They're looking for liquidity," Dingell, a Michigan Democrat, said of retailers.
Dingell said Congress is putting "every idea out there" for how to reengage the economy and create demand. But dealers will need to look at "new, creative ways to do business" — both short term and long term — as employee and customer safety becomes a top priority, she said.
Any federal program that supports new-vehicle sales should also support the overall auto industry, especially the safety of its workers, said Julie Fream, CEO of the Original Equipment Suppliers Association.
"Safety has to be the overriding objective here as we come up to speed," she said.