Sunday, August 23, 2009

Universal Healthcare is another Cash For Clunkers Program

If we are going to nationalize healthcare, we should look how the “Cash for Clunkers” program was a disappointment and failure. There is a big comparison between the two and if we don’t learn from past mistakes, we are condemned to repeat history.

The “Cash for Clunkers” program will end Monday, August 24, 2009. On the surface, many Americans took advantage in trading their gas guzzling car for a newer fuel efficient car. A buyer will get $4500.00 taken off the price sticker of the car automatically and other incentive discounts by the dealer. Once thought that the program will run through November 2009, the money allocated to the program dried-up in less than a month. Congress decided to ante up and added $2 billion more to the program thinking they are doing the public a favor. But alas, the program failed a little over a month.

Why? Well, while it was nice and rosy on the exterior, from behind the scene, it was unraveling at the seams. Let me give you a summary of what happened.
Congress passed this “Cash for Clunkers” program on June 24, 2009. They mandated the National Highway Transportation Safety Administration (NHTSA) to create an agency to oversee the stimulus money to the program, which is called the Car Allowance Rebate System (CARS). Congress mandated the NHTSA to begin the program no later than 30 days. On July 24, 2009, exactly 30 days after the enactment of the bill, the program had its website set up for consumers and dealers. While buyers were buying cars, dealers were inputting the sales of the cars on the government database for reimbursement of the $4500.00. Because of the ineptness of the government, the dealers weren’t getting paid on time. The website failed/crashed and dealers decided to end this foolishness.

There were so many mistakes. To force an agency to implement a brand new program in 30 days without testing the process is stupid. The agency took for granted of the website between dealer and government. Because a huge influx of dealers participating in the program, it was too overwhelming for the computer system to handle. It took dealers throughout the night to register into the program and submitting car sales for reimbursement. This lead to an abnormal number of rejection notices because of missing information by the dealer and an untested computer system.

Now think how the agency works. “Cash for Clunkers” program mandates that once a sales transaction is approved, a dealer is entitled for payment in 10 days. When you have 600,000 car sales sold in a month, what are the chances for a staffer to review and approve the dealer’s submission to be completed on time? I would make the assumption that since it is a federal agency it is highly unlikely. That is why many dealers are opting out from the program because the delay of payment is detrimental to their business. The lack of repayment have place many dealerships into unintended financial losses.

So beware how the federal government acts. They may think they are doing us a worthy service, but giving a very small deadline to implement a $1 billion program, they are doing us a disservice without any consideration to the private sector. I don’t understand why things must be rushed. It only erodes the consumer confidence of the American people. So, when Obama wants to pass this universal healthcare bill, be wary that the same mistake can happen a second time around.