Will “Cash for Clunkers” undo ObamaCare?

Update: Last night my wife reminded me of a meeting that was held a week ago between area car dealers and representatives from NADA, the National Automobile Dealers Association. In that meeting, it was disclosed that one of the contributing reasons for the slow reimbursement process is that early in the program, the government paid out over $100 million without any paper trail or any assurance that the transactions even qualified for reimbursement!

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My wife works at a car dealership. She works in the office and is the person responsible for preparing and filing the paperwork needed for the dealership to be reimbursed under the CARS [Cars Allowance Rebate System] better known as “Cash for Clunkers.” The program has been a needed shot in the arm for her dealership and for dealerships all over the country. However, is the CARS program providing a peek into how health care reform may work?

The CARS program works buy paying $3,500 or $4,500 to a consumer trading in an older, fuel-inefficient car for a new, fuel-efficient vehicle. The difference is based upon the difference in combined MPG from your old car. I wholeheartedly support the concept as it’s a “win-win” for everyone — we take old gas guzzlers off the road replacing them with more efficient cars and provide a short-term boost to struggling automakers. I think the program is a bit too costly. I would prefer seeing the amounts range from $1,500 to $2,500, but that’s my opinion.

The problem is that the government — i.e., the Department of Transportation — has really messed up the administration of the program. Last week it was reported that only two percent of the claims submitted to the department had been paid and there were over 338,000 claims outstanding. The department has only 225 people reviewing the claims which comes up to about 1,500 claims per employee. It got to be so bad that a number of dealer associations were encouraging their members to cease the program. The government finally announced that the program would cease on Monday. When they say “cease,” they mean that all claims must be submitted by Monday. Most dealerships were ending the program on Friday; my wife’s dealership is ending the program today (Saturday) at the close of business. She’s at work now — she’s normally off on Saturdays — and will be working late into the night!

I’m sure the Obama administration will do everything they can do to make sure all claims are reimbursed. If, for some reason, properly-submitted claims are not reimbursed, I hope Republicans raise holy hell about this. If the government cannot properly administer a straight-forward program like CARS, how are they ever going to administer a complicated program like health care reform?

Separate from the arguments brought forth in the town hall meetings held all across the country, the next few weeks will show if the government can even handle something along the order as socialized health care.

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