The House of Representatives voted Friday to rush US$2 billion into the popular, but financially strapped "cash for clunkers" car purchase programme, heeding calls from United States (US) consumers who hope to keep taking advantage of the trade-in incentives.

The bill was approved on a vote of 316-109. House members acted within hours of learning from Transportation Secretary Ray LaHood that the programme was running out of money.

The programme was set up to boost US auto sales and help struggling automakers through the worst sales slump in more than a quarter-century. Sales for the first half of the year were down 35 per cent from the same period in 2008, and analysts are predicting only a modest recovery during the second half of the year.

President Barack Obama said he was encouraged by the House action to keep alive a programme that had "succeeded well beyond our expectations".

Helping the economy

Called the Car Allowance Rebate System, or CARS, the programme is designed to help the economy and the environment by spurring new car sales. Car owners can receive federal subsidies of up to US$4,500 for trading in their old cars for new ones that achieve significantly higher gas mileage.

House Majority Leader Steny Hoyer said the new money for the programme would come from funds approved earlier in the year as part of an economic stimulus bill.

The leader of the House, Speaker Nancy Pelosi, a Democrat, from California., said the cars purchased under the programme were much more fuel efficient than the bill requires.

"Consumers have spoken with their wallets, and they've said they like this programme," said Rep. David Obey, a Democrat.

Republicans argued that Democrats were trying to jam the legislation through. Some lawmakers also complained that many dealers were left to contend with a chaotic government-run programme.

What to do

"The federal government can't process a simple rebate. I've got dealers who have submitted the paperwork three times and have gotten three rejections," said Rep. Pete Hoekstra, a Republican. "What is a dealer supposed to do?"

There had been a US$1 billion budget for rebates for new car sales in the programme that was officially launched last week and has been heavily publicised by automakers and dealers.

The programme offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle, in exchange for scrapping their old vehicle. Congress last month approved the plan to boost auto sales and remove some inefficient cars and trucks from the roads.

The Senate was not scheduled to vote on Friday, but lawmakers hoped to win approval for additional funding this week.

Sen. Carl Levin, a leading Democrat, said the administration assured lawmakers that "deals will be honoured until otherwise noted by the White House". But he suggested that "people ought to get in and buy their cars"