GM Generali

Generali (AQEU:GM)
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A key U.S. House energy committee approved a provision Tuesday as part of a landmark climate bill that would give subsidies to people trading in old cars for newer, cleaner vehicles.

The provision - passed by a 50-4 vote in the House Energy and Commerce Committee - is designed to stimulate auto sales and cut greenhouse-gas emissions.

Dubbed "cash-for-clunkers," it would provide vouchers to people with heavier-polluting cars looking to trade them in for new, more fuel-efficient models. It comes as the U.S. auto industry suffers one of its worst financial crises in its history.

The legislation is almost identical to a bill being considered in the Senate and has broad support across partisan lines.

Specifically, it provides vouchers worth $3,500 to $4,500 to consumers who trade in old cars for new ones that have an average fuel economy that is between two and 10 miles per gallon higher than those being trading in. It allows for rebates on around 1 million cars, costing taxpayers $4 billion for the program.

The amendment is part of a controversial and historic bill that aims to cut greenhouse gases by 80% over the next half-century. The Democratic leadership aims to pass the bill out of committee by the end of the week and hopes to get approval for the legislation in the full House in late June or early July.

-By Ian Talley, Of Dow Jones Newswires; 202-862-9285; ian.talley@dowjones.com