Home-Buyer Tax Credit Proposals Compete In Senate
By Corey Boles, Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- Senate Majority Leader Harry Reid, D-Nev., floated a
new version of a popular home-buyer tax credit extension, and aides say he aims
to have a vote on the measure as part of the coming debate over extending
federal unemployment insurance benefits.
The alternative proposal would continue the $8,000 credit for four months past
its current Nov. 30 expiration, and gradually phase it out after that.
The value of the credit would drop by $2,000 every quarter until it halted
completely by the end of 2010.
The proposal is the latest of at least three different Senate alternatives to
ensure the credit doesn't expire at the end of November.
Another would increase its limit to $15,000 as well as opening it up to all
home buyers, instead of just first-time buyers as is currently the case. That
plan would also raise the income thresholds to allow more people to qualify for
the credit.
Yet another plan would simply extend the credit in its current form through
June.
Lucien Salvant, a spokesman for the National Association of Realtors, said the
group believed the most generous of the three extensions, backed by Sens.
Christopher Dodd, D-Conn., and Johnny Isakson, R-Ga., would be the most
effective in spurring home sales.
"It covers the first two quarters of 2010, especially the second quarter,
which is the height of the spring buying season," Salvant said.
He said home-buying activity in that three-month period could be crucial for
permanently righting the housing market again.
On the contrary, the Reid proposal wouldn't be nearly as effective at
stimulating home sales, Salvant said, because it would start winding down during
the second quarter.
The debate comes as a Treasury auditor revealed this week that the Internal
Revenue Service improperly issued millions of refunds related to the credit.
At a House panel hearing this week, an IRS official said it is reviewing 100,
000 returns to determine if credits were paid appropriately.
Given the popularity of the credit, however, experts say the allegations are
unlikely to derail the push to extend it in some form.
In the Senate, there are likely to be votes on at least one, and perhaps
several different versions of the credit when the unemployment insurance
benefits bill comes up for debate.
That bill has been held up for more than two weeks now due to disagreement
between party leaders over what amendments would be allowed votes during debate
on it.
As of Friday, that dispute continued. Republicans are pushing for a vote on a
measure strengthening a program for employers to determine whether prospective
employees are legal residents.
Democrats, who don't believe the program, called e-verify, is effective, are
reluctant to allow the Republicans to attempt to attach the measure to the
unemployment insurance bill.
Republicans also want to bring up a variety of ways to pay for the jobless
benefits extension instead of the tax on employers that Democrats would propose
to pay for it.
The Senate unemployment bill would extend federal jobless benefits for up to
20 weeks for long-term unemployed people.
- By Corey Boles, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com
(Jessica Holzer and Martin Vaughan contributed to this article.)
(END) Dow Jones Newswires
10-23-091427ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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