Clunkers Chaos Previews Catastrophic Risks in ObamaCare

As ObamaCare lurched unsteadily toward enactment, Cash for Clunkers burst into the news a second time, and the suffering of cooperative auto dealers reminds us of the great risk we take when granting government authority for our well-being.


Car dealers are not sympathetic figures in the American culture.  But if they suffer government inflicted financial hardship the consequences spill over into the communities where they do business.

It appears that placing their trust in the Cash for Clunkers program has driven thousands of dealers into desperate financial circumstances, some on the verge of closing and laying off employees.

Put simply, the program requires dealers to advance $3,500 or $4,500 rebates to customers who trade in vehicles that qualify as “Clunkers” and then apply to the federal Department of Transportation (DoT) for reimbursement.

Congressman Joe Sestak, Democrat from PA just sent the President a letter demanding urgent action to clear the log jam in Cash for Clunkers reimbursements.  According to Sestak only 2% of Dealer claims have been paid and thousands have been rejected by the bureaucracy for, in Sestak’s words, “minor oversights.”

The Greater New York Auto Dealers Association reports that 425 of it’s member dealers have been forced to drop the Clunkers program because they have not seen any reimbursement from the government for thousands of rebates they have advanced to customers.  They are out of cash and fear they will not be paid at all.

According to DoT, dealers have submitted 338,659 claims for reimbursement in the first month.  Also according to DoT 225 government employees have been assigned to the program.  DoT doesn’t say when they were assigned, or how they were trained.  The on line reimbursement process is mind-numbingly complex, requiring dealers to complete some 20 forms.  Government employees would have to take a substantial training program to understand the purposes and interpretation of all those forms and the regulations they connect to.  Have they been trained?  Are they wrongly rejecting dealer claims?  We’ll never know for sure because the answer lies deep in the bowels of the bureaucracy.  It’s likely the President himself can’t get a straight answer.

Even those who don’t like car dealers should wonder if ObamaCare, a thousand times more complex than Clunkers, can be implemented without catastrophic bureaucratic quagmires that can never be sorted out.   How many un-reimbursed doctors and hospitals will be driven out of business, and how many patients will suffer or even die because the system simply fails to function?

1 Comment so far

  1. Forgotten Liberty on August 20th, 2009

    Why can’t people wake up and realize that anytime government injects itself into the free market things get screwed up?