a car drawn by a horseAfter a minor standoff last night, it looks like the Senate has worked out its problems, and one of the most popular government programs in recent memory will continue.

By KEN THOMAS and LAURIE KELLMAN (AP) – WASHINGTON — The Senate reached a deal on saving the dwindling "cash for clunkers" program late Wednesday, agreeing to vote on a plan that would add $2 billion to the popular rebate program and give car shoppers until Labor Day to trade in their gas-guzzlers for a new ride.

Following lengthy negotiations, Senate Majority Leader Harry Reid said Democrats and Republicans had agreed to vote on the plan Thursday, along with a series of potential changes to the bill, which was passed by the House last week. Reid has said Democrats have enough votes to approve the measure and reject any changes that would cause an interruption in the rebates of up to $4,500.

Reid said the agreement "accomplishes what we need to accomplish."

Late Wednesday, it was not clear that any of the proposed amendments stood a chance of passing. Some of them included placing an income limit on those benefiting from the vouchers and requiring the government to sell off its stakes in General Motors Co. and Chrysler Group LLC.

Any Senate changes to the bill would require another vote in the House, something that couldn’t take place until the House returns in September from a monthlong recess.

The government said Wednesday that more than $775 million of the $1 billion fund had been spent, accounting for nearly 185,000 new vehicles sold. President Barack Obama has said the program would go broke by Friday if not replenished by Congress.

Administration officials have estimated the additional $2 billion could fund another 500,000 vehicle sales and last into Labor Day.

That’s the same day the Senate was to follow the House into the August recess, a looming break that Senate leaders often use to prod their colleagues past standoffs.

"We all acknowledge there’s a significant majority that want to move forward with this legislation," Reid, D-Nev., said earlier in the day, adding that he has the votes to approve the House-passed version as is.

His Republican counterpart, Sen. Mitch McConnell of Kentucky, concurred that the matter would be settled soon. And objectors conceded they do not have the votes to force all of the changes they want, or to block the House version of the bill.

"My guess is, at the end of the day, it will pass," said Sen. John Thune, R-S.D., who called it an example of "Congress choosing winners and losers among industries."

The program offers car buyers rebates of between $3,500 and $4,500 for trading in their gas-guzzlers for new, higher-mileage models.

The new funding would triple the cost of $1 billion rebate program and give as many as a half-million more Americans the chance to grab the new car incentives through September.

Car companies have credited the clunkers program with driving up sales in late July. Most consumers are buying smaller, more fuel-efficient vehicles under the program, according to a list of the top-10 selling cars released Wednesday by the National Highway Traffic Safety Administration…

Senate passage would send the legislation to the White House for Obama’s signature and assure consumers there will be no interruption in the program that has led to packed car dealerships nationwide.

The deals are aimed at boosting auto sales, which have been at their lowest levels in two decades.  [more here]