HUD Secretary: Administration To Decide On Home Tax Credit Within
2 Weeks
By Jessica Holzer, Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- A senior official said the Obama administration will
decide within a couple of weeks whether to back an extension of the $8,000
first-time home-buyer tax credit, which is set to expire Nov. 30.
The administration feels the urgency to make a decision soon but also wants to
assess the costs of the tax credit before acting, Department of Housing and
Urban Development Secretary Shaun Donovan told a U.S. Senate panel Tuesday.
"We understand that a decision needs to be made within just a few weeks to be
able to ensure that those buying housing understand whether they will be
eligible for the credit," Donovan said.
"And I'm committed--the administration is committed--to getting to that
decision within just a couple weeks to make sure that the market doesn't become
interrupted," he added.
Donovan said the costs of the tax credit wouldn't become clear until people
filed their tax returns. That information isn't easy to gather, he said.
However, he implied officials could get hold of enough cost data to decide
within the next few weeks on the tax credit.
Donovan told reporters that it was clear the tax credit has helped the housing
market. "The real question is at what cost and that's what we're trying to get
definitive information on," he said.
The administration would look at the costs of fraud involving the tax credit,
Donovan told reporters, though he declined to divulge the scope of the problem
or say whether this was a concern of the administration's. The Internal Revenue
Service has charged some people with fraudulently claiming the credit.
Support for extending the credit appears to be growing in Congress, though
several lawmakers are likely to balk at the multi-billion-dollar price tag.
Passed last year, the credit was made more generous to home buyers as part of
economic stimulus legislation enacted earlier this year.
Sen. Richard Shelby of Alabama, the panel's top Republican, questioned whether
the tax credit has been an efficient tool to stimulate the economy. He cited
estimates showing that as much as 85% of home purchases would have been made
without the tax credit.
Sen. Johnny Isakson (R., Ga.), a 33-year veteran of the real-estate industry,
made a strong case for extending the tax credit and broadening it to all people
buying a principal residence.
"Nobody has argued that the tax credit hasn't worked. That's why there's
interest in extending it," he said in testimony to the panel, adding, "I think
it's our way out" of the housing downturn.
Isakson and Senate Banking Chairman Christopher Dodd (D., Conn.) are pushing
legislation to extend the tax credit through June 30, 2010, and expand it beyond
first-time buyers. The bill would also loosen the income caps on the credit. The
proposal would cost roughly $16.7 billion, according to congressional analysts.
Isakson said he was open to pinpointing measures that cut spending or raise
tax revenue in order to cover the cost. "I'm perfectly willing to find 'pay-
fors' in the system to pay for it," Isakson said.
-By Jessica Holzer, Dow Jones Newswires; 202-862-9228; jessica.holzer@
dowjones.com
(END) Dow Jones Newswires
10-20-091253ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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