'Clunker' Sales Honored Through Tuesday, LaHood Says

[Pirate Smile]

Source: The Wall Street Journal

WASHINGTON -- Transportation Secretary Ray LaHood said the Obama administration would honor any "Cash for Clunkers" car sales through Tuesday, but warned that unless the Senate approves a $2 billion funding extension this week, the administration would be forced to pull the plug on the popular program.

"What I'm committed to saying this morning is that any deal that is made tomorrow or the next day and is in the pipeline will be reimbursed," Mr. LaHood said, in an interview on CSPAN's The Newsmakers program Sunday morning.
Mr. LaHood said the chaos in the clunkers program late last week was due to processing errors at the outside contractor hired by the Department of Transportation to administer the plan, Citigroup Inc.

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Dealers are expected to include the subsidies in the cost of the car, and be reimbursed afterwards by the federal government. But many dealers reported that the clunkers Web site would not allow them to submit applications, and fears were expressed that dealers would be on the hook if the $1 billion was exhausted.

Mr. LaHood pledged to resolve the backlog of several thousand applications immediately.
"We are fixing this today," he said.
The fact that Citigroup, already much maligned due to its heavy involvement in the bursting of the U.S. housing bubble, was the culprit in this situation will not come as good news for executives at the beleaguered bank.





Read more: http://online.wsj.com/article/SB124922988694299529.html

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1. Umm, why did we outsource this to Citigroup?

This seems like the perfect sort of plan for the government to run itself. This is a one-off plan that hasn't been done before, so I fail to see what expertise Citigroup would be bringing to the table for this contract.

[BumRushDaShow]

2. They outsourced because

ever since Raygun, the fed. gov't has been gutted (particularly in IT and other administrative services, which were ripe for contracting-out due to http://www.whitehouse.gov/omb/rewrite/circulars/a076/a076.html">A-76) and retirees were not replaced (loss of institutional knowledge). So it will take time to restaff the relevant civil service personnel with the expertise.