WASHINGTON – Congress passed a $2 billion extension of the popular “cash for clunkers” program Thursday evening, clearing the legislation for President Obama’s signature. Obama administration officials have said that without new funds, the program would have expired by Friday.

The Senate passed the extension Thursday evening. The House approved the measure last week, The Wall Street Journal reported.

Lawmakers made sure to keep the popular program alive before heading home for a month-long vacation. Automakers have cited the incentive program as �??driving the bus�?� for July auto sales, which were the best so far in a down auto sale year.

Under cash for clunkers, consumers qualify for up to $4,500 in federal subsidies when they trade in their cars for new, more energy-efficient models. In 10 days, the program has instantly increased sales for an auto industry long mired in recession.

The surge in auto sales sparked by the $1 billion first phase of the government program, which followed extensive production shutdowns earlier in the year, has left major auto makers with unusually lean inventories.

The initial $1 billion in funding is close to being exhausted after just two weeks, according to the Obama administration, which has supported efforts to put more money into the program.

Ford Motor Co., General Motors Co. and Chrysler Group LLC are weighing whether to increase output of vehicles beyond current plans, which would increase workers’ hours and possibly add some jobs at their plants and those of hundreds of suppliers.

Chrysler told dealers this week that it hoped to produce 80,000 vehicles in October, up from a previous forecast of 60,000, according to a person familiar with the matter. The company told dealers the move was in response to the tight inventories and stronger sales that resulted from the clunker program.

Ford is considering boosting production of its vehicles that are selling well under the clunker program, such as the Ford Focus compact and the Ford Escape crossover, according to Ford officials.

At the end of July, Ford dealers had enough Focuses to last 25 days at the current sales rate and enough Escapes to last 21 days, according to Autodata Corp. The industry generally considers a 65-day supply to be optimal.

Ford is now reviewing its production plan to see whether an increase is needed. It is talking to suppliers to determine how much it could possibly boost output, but it won’t announce any moves until the end of the month, according to George Pipas, the company’s top sales analyst.

The company is considering having some workers who assemble the F-150 pickup truck in Kansas City, Mo., switch to production of the Escape and a similar vehicle, the Mercury Mariner, at the same plant, spokeswoman Marcey Evans said.

GM is considering adjusting production schedules, and as soon as next week could announce some increases, a person familiar with the matter said. Some United Auto Workers locals have been told overtime work might be needed soon, this person said.

As of July 31, GM had a 64-day supply of cars and trucks in its dealerships, down from 82 at the end of June.

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