MALVEAUX: OK, Brianna.

Thank you so much.

With business picking up, is it a time for the car industry to stand on its own four wheels, essentially?

Joining me now, Transportation Secretary Ray LaHood.

Thank you for joining us here in THE SITUATION ROOM.

Obviously, there is some good news to this picture. You've got Ford, GM, Chrysler and Honda all saying they're reporting dramatic increases in sales thanks to the Cash for Clunkers program. It seems to me as if you have done what you set out to do, this legislation, the program. You put a billion dollars into the program. These car companies are doing well.

Why extend it now?

Why more taxpayer dollars into this program?

RAY LAHOOD, TRANSPORTATION SECRETARY: Because this is what the American people want. And for the first time in two years, Ford has an increase in their sales. And this will continue for G.M. It will continue for Chrysler. It will continue for other car manufacturers if the program continues. And it will be a lifeline to the automobile industry, to American workers who manufacture cars and to our economy.

If something is working, we should continue it. And that's the purpose of us asking the Senate to put forth $2 billion, the way the House did last week.

MALVEAUX: A lifeline for the industry, but when does it become life support?

When do you have to basically say you're on your own now, enough is enough of taxpayer dollars, now it's time for you to go ahead and make it on your own?

LAHOOD: This is part of the cure for the industry. And it's for automobile workers, also. And also, salesmen who sell cars. And also, for automobile dealers, who haven't seen people in their showrooms for months.

And so as we continue this program, we will know pretty quickly that this will be the lifeline that will save this industry for America and for the workers and for the car salesmen and for the automobile dealers.

MALVEAUX: How will you know when the appropriate time is to cut off the funds?

LAHOOD: Well, as we ramped up, we had no I -- I mean we were shocked at the number of people who came into the showrooms. And as people begin to buy automobiles and continue to do that, we will know pretty quickly when the program has sort of run its course. I think we'll know that by the number of people who are in showrooms and the number of automobiles that are sold.

MALVEAUX: How do you respond to some of those senators -- obviously, Claire McCaskill -- who says we simply can't afford anymore taxpayer dollars to extend Cash for Clunkers, the idea was to prime the pump, but not subsidize auto purchases forever?

LAHOOD: Well, we can't afford not to, because the automobile industry is hurting, American workers are hurting. Dealers are hurting. We know this has been a very strong lifeline. We want to continue that. We want to continue it through the month of August.

We believe that $2 billion will continue to be helpful. And then, you know, Congress can decide when they come back after Labor Day. And we'll also have much better figures then, too, as to how much longer we should proceed.

MALVEAUX: Do you have any idea how long you think the $2 billion will -- will keep this program going?

LAHOOD: We believe it will take us through the -- through the month of August until after Congress comes back after Labor Day.

MALVEAUX: Obviously, one of the goals -- the main goal of this program, too, is the environment -- protecting the environment, less carbon footprint, better gas mileage. You have these cars, we've seen them at many dealers we've been to. You bring them in there. They put some sort of mixture into the engine, destroy it. You've got the scrap metal.

What happens to all those heaps of -- of metal and what these cars once were?

Where do they go?

How does that impact the environment?

LAHOOD: Yes. The engine is killed. So you actually kill the engine that's producing a lot of the pollution and the gas guzzler engine is killed. But the water pump, the brakes, you know, will be -- will go to a scrap yard. And you'll have automobile dealers who are trying to find parts for different automobiles using the brake parts or the water pump or the fuel pump.

And so the scrap dealer will make some money off of this, too. And, again, it helps the economy because the scrap dealer can actually then sell these off to dealers or car maker -- car people that want to use them.

MALVEAUX: And real quick, Mr. Secretary, the last go round, the -- some of the -- the Web site -- and the White House Web site, it crashed there were so many people who were interested. There was six hours of paperwork per vehicle for some of these dealers to -- to actually process.

What do you do the second go round to make this better?

What are you going to do differently?

LAHOOD: Our people were in Delaware yesterday. We've hired Citigroup to help us and Oracle to help us, as contractors to help us. They've hired additional people. We will have many more people processing these deals as they come through. And we believe there will be enough people -- and enough trained people -- to make sure we don't have the same kind of dilemma that we faced the first four days of the program.

MALVEAUX: All right. Secretary LaHood, thanks for joining us here in THE SITUATION ROOM.

LAHOOD: Thank you.