It’s no longer a program to get consumers to buy more fuel efficient cars, but a subsidy to get consumers to clear inventory off of dealer lots, as Henry Payne noted in this space last week. Today’s WSJ:

These new proposals have clarified the real purpose of the effort. What started out as a scheme to entice owners of gas-swilling sport-utility vehicles to switch to high-mileage hybrids or small cars is morphing into a more industry-friendly effort to subsidize the clearance of some 400,000 large pickup trucks now sitting on dealer lots.
“It’s more of a volume driver than a portfolio changer,” says Michael Robinet of CSM Worldwide, an automotive consulting firm.
Here’s how the latest cash-for-clunkers proposal floated last week by the House Energy and Commerce Committee would help auto makers sell leftover pickups. (A Senate proposal under construction by Sen. Debbie Stabenow, a Michigan Democrat, and others would operate in roughly similar fashion.)
Say you owned a 2001 Dodge Ram four-wheel-drive pickup with a 5.9-liter engine. That truck has an EPA combined fuel economy of just 13 miles per gallon. Under the House proposal, you could scrap that vehicle and get up to $4,500 toward a truck weighing more than 6,000 pounds that got at least 15 miles per gallon. One that might qualify — depending on how weight is defined and measured — is a 2009 Dodge Ram 1500 four-wheel-drive pickup with a 5.7-liter V-8 and a combined 15 mpg.
That maximum $4,500 voucher is available to anyone who turns in an old truck (the House proposal doesn’t say how old) and buys a new one with at least two miles per gallon better EPA combined mileage ratings. A one-mile-per-gallon gain would make the buyer eligible for a $3,500 scrap allowance.
Consumers would still need to be informed and know what their old vehicle is worth. Handing over a vehicle to be scrapped for less than its trade-in or potential private-sale value probably doesn’t make sense.