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Buyers of new cars and trucks have swamped formerly deserted auto dealers to claim their rebates - up to $4,500 when they trade in older models that get significantly worse gas mileage. The older vehicles are then scrapped.
The program has encouraged about a quarter-million Americans to buy new cars at time when the economy is still in recession and badly needs a boost.
Because the House has already recessed for August, any change by the Senate would effectively interrupt the rebate program until Congress returns in September. Consumers who do not get in on a deal this week would have to wait until then to take advantage of the rebates, assuming eventual passage.
"I think the last thing any politician wants to do is cut off the opportunity for somebody who wants to get a rebate to buy a new automobile," Transportation Secretary Ray LaHood, said Tuesday.
On Monday, the White House had warned that the program could come to an abrupt halt Friday if the Senate did not act favorably on the bill passed by the House last week transferring $2 billion from an economic stimulus account that had been set aside to subsidize renewable energy. The new money would carry the program through September, said White House Press Secretary Robert Gibbs.
Through early Tuesday, the clunkers program had recorded 157,000 transactions worth $664 million. Eighty-three percent of the vehicles traded in were trucks or SUVs, while 60 percent of the vehicles purchased were passengers cars, for an average increase in fuel efficiency of 61 percent, Gibbs said.
Opposition to extending the program has been dissipating. One vocal Republican critic, Sen. Jim DeMint, said Tuesday he would not try to block the legislation. And three lawmakers who wanted the program limited to the purchase of even more fuel-efficient vehicles said Monday they would back the plan.
Yet Democrats as well as Republicans have raised concerns. Senators in both parties have said it costs too much. Some Democrats have argued that the program should require tougher emissions standards for the new vehicles. Republicans have said it puts the government in the bad position of picking winners and losers.
"People want to know what's going to be next. Cash for shoes? Cash for groceries?" said Sen. Richard Shelby, a Republican.
The first $1 billion in funding is expected to lead to sales of 250,000 vehicles and the additional $2 billion would generate sales of perhaps a half-million more vehicles.
Car companies have credited the clunkers program with driving up sales in late July. Ford said its sales rose 2.4 percent in July from the same month last year, its first year-over-year increase since November 2007, while Chrysler Group LLC posted a smaller year-over-year sales drop compared with recent months, helped by the special deals. Other automakers are doing better, too.
Most consumers are buying smaller, more fuel efficient vehicles under the program, according to a list of the top-10 selling cars released by the National Highway Traffic Safety Administration.
That includes Honda Civics, Toyota Corollas and Dodge Calibers. The Toyota Prius hybrid, which gets 46 miles per gallon (20 kilometers per liter) according to government estimates, is the fourth-best-selling car. There is one sports utility vehicle on the list, the Ford Escape, which also comes in a hybrid model that can get up to 32 miles per gallon (14 kilometers per liter).
