I don't know about this - something that has popped up a few times before but never really seen the light of day - until now.
Sounds really good on paper - but what will this really accomplish? Where are they getting money to subsidize this program? What are they going to do about the old cars that are turned in? Will this really help the automakers, the environment, public safety, etc. of put more a of a burden on the taxpayer's shoulders? How will they prevent potential abuse of the system? If the owners of the "clunker" cars could not afford to upkeep the car, would a small subsidy afford them to a new car?
Lots of questions - no definite answers. To me, this sounds like a definite fail proposal. A lot of resources spent on something that would only legitimately benefit a handful of people. If the wanted to really help out - they should subsidize tuneups on the gross polluters. For ones that get dismal fuel economy, the generaly public should not shoulder the costs for someone elses short-sidedness.
2002 Corolla S, Silverstream, 1.8L 1ZZ-FE (VVT-i)
2003 Matrix XRS, Cosmic Blue, 1.8L 2ZZ-GE (VVTL-i)