No clunker rebates for rich? Or poor? Oops

[August 07, 2009]  WASHINGTON (AP) -- Sen. Tom Harkin, D-Iowa, wanted to prevent Microsoft founder Bill Gates and other rich people from benefiting from the "cash-for-clunkers" program.

But his proposal would also have inadvertently disqualified many low-income car buyers from getting the incentives. Harkin tried to fix the error Thursday but when that failed, he took the rare step of urging his colleagues to reject his own amendment.

"Quite frankly, I couldn't even support it because it doesn't do what I originally wanted it to do," Harkin said.

The Iowa senator proposed limiting further rebates to families with incomes of less than $75,000 a year or to individuals with less than $50,000.

Harkin said that even Gates, with a net worth estimated at $57 billion, could trade in a clunker and get a rebate on a new car. "You have to ask, Is this a wise way to spend limited amounts of money?"

But Harkin's plan required people to file income tax returns to show they qualify. Many low-income workers earning minimum wage or less don't file tax returns, which would have disqualified them for the rebates of $3,500 or $4,500.

Harkin acknowledged his amendment was poorly drafted. But Republicans wouldn't let him withdraw it and Sen. Carl Levin, D-Mich., objected to letting him change it. Harkin then asked the Senate to reject his own amendment. It did on a 65-32 vote.

[Associated Press]

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