[Congressional Record Volume 141, Number 76 (Tuesday, May 9, 1995)]
[Senate]
[Pages S6357-S6358]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


    SENATE RESOLUTION 117--RELATING TO DEDUCTIONS FOR HOME MORTGAGES

  Mr. ROTH (for himself, Mr. D'Amato, and Mr. Kempthorne) submitted the 
following resolution; which was referred to the Committee on Finance:

                              S. Res. 117

       Whereas homeownership is an important factor in promoting 
     economic security and stability for American families;
       Whereas homeownership is a fundamental American ideal, 
     which promotes social and economic benefits beyond the 
     benefits that accrue to the occupant of the home;
       Whereas homeownership promotes and stabilizes neighborhoods 
     and communities;
       Whereas it is proper that the policy of the Federal 
     Government is and should continue to be to encourage 
     homeownership;
       Whereas the increase in the cost of housing over the last 
     10 years has been greater than the increase in family income;
       Whereas for the first time in 50 years, the percentage of 
     people in the United States owning their own homes has 
     declined;
       Whereas the percentage of people in the United States 
     between the ages of 25 and 29 who own their own homes has 
     declined from 43 percent in 1976 to 38 percent today;
       Whereas the current Federal income tax deduction for 
     interest paid on debt secured by first homes located in the 
     United States has been a valuable cornerstone of this 
     Nation's housing policy for most this century and may well be 
     the most important component of housing-related tax policy in 
     America today;
       Whereas the current Federal income tax deduction for 
     interest paid on debt secured by second homes located in the 
     United States is of crucial importance to the economies of 
     many communities; and
       Whereas the Federal income tax deduction for interest paid 
     on debt secured by a first or second home has been limited 
     twice in the last 6 years, and was further eroded as a result 
     of the Omnibus Budget Reconciliation Act of 1990: Now, 
     therefore, be it
       Resolved, That it is the sense of the Senate that the 
     current Federal income tax deduction for interest paid on 
     debt secured by a first or second home located in the United 
     States should not be further restricted.

  Mr. ROTH. Mr. President, of the challenges confronting America 
today--challenges that must be addressed by this Congress--the security 
of the American family is paramount. Much has been written and spoken 
about the welfare of family life, about the need to keep the family 
unit strong in our effort to secure a bright and productive American 
future.
  One of the significant resources our families have is home ownership. 
Indeed, this resource is of such value that home ownership is 
considered the icon of the American dream. It lends to economic, 
physical, and emotional security. It keeps our neighborhoods strong and 
contributes to a necessary sense of community. It gives families not 
only a stake in the future, but a means to improve the future. Home 
equity and ownership often become the means by which we send our 
children to college, finance small businesses, or prepare for 
retirement.
  It's clear that the benefits of home ownership go far beyond the 
family; they contribute to society as a whole. For example, the 
property tax base is often the foundation for public education. And as 
a Nation we have been richly rewarded by the Government policies that 
have encouraged people to realize the American dream.
  What concerns me today, Mr. President, is that a full 60 percent of 
Americans can no longer afford a median-priced home. It concerns me 
that the increase in the cost of housing over the last 10 years has 
been greater than the increase in family income. And it concerns me 
that for the first time in 50 years, the percentage of people in the 
United States owning their own homes has declined.
   [[Page S6358]] When trends like these threaten the American Dream, 
and these trends are being felt, Mr. President, I was troubled by a 
Gallup-CBS polls taken recently that showed that 8 out of every 10 
Americans believe it will be harder for the next generation to achieve 
the American Dream--8 out of every 10. When these trends threaten the 
American Dream of home ownership, we must be clear in our policies here 
in Washington, that we will continue to work to promote an environment 
of security and opportunity.
  Mr. D'AMATO. Mr. President, I am pleased to join my distinguished 
colleague from Delaware, Senator Roth, in submitting a resolution to 
prevent further restriction of the Federal income tax deduction for 
home mortgage interest. To further limit or eliminate the deductibility 
of mortgage interest for homeowners--the majority of which are middle-
income Americans--would be to restrict their ability to buy into the 
American dream.
  It is no secret that homeownership is a fundamental American ideal. 
Cutting or wiping out this deduction, which has been available to 
Americans since 1913, will simply put the possibility of homeownership 
out of reach for many Americans. The mortgage interest deduction is one 
of a number of tax benefits that serves a good social purpose. It is 
not an unintended loophole but, rather, a provision created to foster 
investment by the private sector. The home mortgage interest deduction 
has served as one of the cornerstones of our national housing policy, 
making us one of the best housed countries in the world and creating 
safe and secure neighborhoods.
  Further restrictions could also have a disastrous effect on the 
American housing industry, especially if interest rates continue to 
rise. People simply will not be able to buy homes, which would have a 
devastating impact on the economy, particularly the banking, lending 
and construction industries. Higher unemployment rates would result and 
local governments would suffer, as shrinking homeownership would, in 
turn, mean a dwindling tax base.
  Mr. President, the National Association of Home Builders estimates 
that eliminating the home mortgage interest deduction would reduce the 
value of an average American home by about 20 percent. For all intents 
and purposes this would have the effect of a heavy tax increase. For 
the sake of the economy and middle-income Americans we cannot erode the 
American dream: homeownership.


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