[Congressional Record Volume 155, Number 53 (Monday, March 30, 2009)]
[Senate]
[Page S3983]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   HOUSING AND ECONOMIC RECOVERY ACT

  Mr. SPECTER. Mr. President, I have sought recognition to discuss S. 
253, a bill introduced by Senator Johnny Isakson to expand the home 
buyer tax credit. I support this legislation and have asked to be added 
as a cosponsor.
  A robust home buyer tax credit will spur consumer demand and help to 
stop the fall in home values, which continues to affect millions of 
Americans. This decline is destroying the savings and net worth of 
Americans, whose homes are their most valuable asset. Many now have 
mortgages that exceed the value of their homes.
  The Housing and Economic Recovery Act of 2008 created a tax credit 
for first-time home buyers of $7,500 through June of 2009. However, 
taxpayers were required to repay the tax credit in equal installments 
over 15 years, which greatly reduced its effectiveness. The 2009 
Stimulus bill waived the repayment requirement for purchases made in 
2009, increased the value of the credit to $8,000, and extended 
eligibility for purchases made through November of 2009.
  Further improvements are necessary, in my judgement, to bring about a 
recovery in the housing market that will ultimately contribute to the 
turnaround of the broader economy. First, S. 253 would increase the 
value of the credit to 10 percent of the home price capped at 3.5 
percent of Federal Housing Administration loan limits. These limits are 
geographically dependent and would yield a credit ranging between 
approximately $10,000 and $22,000.
  Second, S. 253 would make the home buyer tax credit available to any 
individual who purchases a home, not just first-time home buyers. Doing 
so would stimulate demand for the entire range of homes on the market.
  Finally, S. 253 would increase the income eligibility threshold to 
individuals earning up to $125,000, or $250,000 in the case of a joint 
return. Currently, the credit is reduced for individuals with modified 
adjusted gross income, AGI, of more than $75,000--$150,000 for joint 
filers--and is zero for those individuals with modified AGI in excess 
of $95,000--$170,000 for joint filers. Again, doing so would stimulate 
demand for the entire range of homes on the market.
  The need for a robust home buyer tax credit is clear. According to 
the National Association of Realtors, pending home sales hit a record 
low in January 2009. The pending home sales index, which measures the 
number of sales contracts signed each month, fell 7.7 percent to 80.4, 
the lowest mark since 2001 when tracking began.
  At the same time, the housing affordability index rose 13.6 
percentage points to a record high of 166.8. A value of 100 means that 
a family with the country's median income has exactly enough income to 
qualify for a mortgage on a median-priced existing single-family home. 
The higher the index, the better housing affordability is for buyers.
  These two figures, taken together, demonstrate that a robust home 
buyer tax credit is needed to spur demand from Americans that are 
hesitant to buy homes for fear that prices will not stabilize.

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