House Democrats put focus on homeowner aid

April 09, 2008|By Cox News Service

WASHINGTON -- House Democrats, opposed to the Senate's focus on helping homebuilders, moved yesterday to reshape housing legislation to help more homeowners.

"We need to provide relief to the buyers and families themselves, not just the banks and builders," Rep. Charles B. Rangel, a New York Democrat, said in a statement. House Democrats intend to put "families first," he said.

Today, Rangel's Ways and Means Committee will vote on his legislation to provide tax breaks to homeowners, first-time homebuyers and developers of low-income housing.

In contrast to the Senate, Rangel will not offer about $25 billion in tax breaks to homebuilders and bankers.

Also today, House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat, will hold a hearing on his bill to provide $300 billion for federal guarantees of mortgages for troubled borrowers if lenders make them more affordable.

Rangel said he designed his bill to "complement" Frank's legislation. The House's Democratic leadership could combine the two into a single package for a House floor vote.

The housing debate is unfolding as Democratic leaders are considering using a war spending bill as a vehicle for additional economic aid, such as an extension of jobless benefits and food aid for the poor.

House Speaker Nancy Pelosi of California and Senate Majority Leader Harry Reid of Nevada are calling for the rescue package that President Bush signed in February, including $300 to $1,200 rebates for most wage earners, to be followed up with another so-called "stimulus" plan.

"We're going to look at the supplemental not only for the war funding, which is about $109 billion, but also what we can do ... for summer jobs programs, extending unemployment benefits, some things that would be stimulative to the economy," Reid said.

Meanwhile, the Senate is swiftly moving toward a vote on its version of housing legislation. The Senate emphasizes tax breaks for homebuilders, lenders and other money-losing businesses.

Yesterday afternoon, the Senate voted, 92-6, to limit debate on that package, setting the stage for a vote today.

While all six "no" votes came from Republicans, the vast majority of their colleagues backed the bill. So it came as something of a surprise when the White House offered a negative assessment of the Senate bill.

At a news briefing, White House press secretary Dana Perino said elements of the Senate legislation would "likely do more harm than good by bailing out lenders and speculators and passing on costs to other Americans who play by the rules and honor their mortgage debt obligations."

Senate Banking Committee Chairman Christopher J. Dodd, a Connecticut Democrat, and the committee's top Republican, Richard C. Shelby of Alabama, wrote the package. Its centerpiece is a "carryback" provision that lets businesses increase to four years, from two, the time they could apply losses suffered in 2008 and 2009 to past tax bills. That would help builders offset profits made during boom times with their recent losses.

The Senate, at the prodding of Republican Sen. Johnny Isakson of Georgia, also included a provision to create a tax credit of up to $7,000 over two years for people who buy foreclosed homes.

The House measure does not include the carryback breaks and scratches Isakson's tax-credit plan. Instead, it would create a temporary tax credit of as much as $8,000 for first-time buyers and increase the availability of tax credits for investors in low-income housing.

The Associated Press contributed to this article.

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