[Congressional Record Volume 155, Number 53 (Monday, March 30, 2009)]
[Senate]
[Page S3994]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SPECTER:
  S. 740. A bill to amend the Internal Revenue Code of 1986 to expand 
the homebuyer tax credit, and for other purposes; to the Committee on 
Finance.
  Mr. SPECTER. Mr. President, I have sought recognition to introduce 
legislation to further expand the home buyer tax credit.
  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 judgment, to bring about a 
recovery in the housing market that will ultimately contribute to the 
turnaround of the broader economy. First, this bill would amend the 
Stimulus bill and raise the value to $15,000, or 10 percent of the 
value of the home, whichever is less.
  Second, this bill 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, this bill would remove the income eligibility threshold. 
Again, doing so would stimulate demand for the entire range of homes on 
the market. 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.
  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.
  Recent reports indicate a 13-month supply of unsold new homes, 
compared with a 4-month supply under more normal circumstances. Add to 
that a continually increasing number of foreclosed homes. According to 
the RealtyTrac 2008 Year-End Foreclosure Market Report, a total of 3.2 
million foreclosure filings--default notices, auction sale notices and 
bank repossessions--were reported on 2.3 million U.S. properties during 
2008, an 81 percent increase in total properties from 2007 and a 225 
percent increase in total properties from 2006.
  Jobs across all industries have been lost as a result of the housing 
crisis. According to a March 2, 2009, op-ed in the Washington Post by 
Robert J. Samuelson, ``Since late 2007, housing-related jobs--
carpenters, real estate agents, appraisers--have dropped by 1 million, 
a quarter of all lost jobs.''
  I applaud the efforts of Senator Johnny Isakson, who has been the 
leader on this issue in the Senate. I cosponsored his legislation in 
the 110th Congress to create a home buyer tax credit. In the 111th 
Congress, I supported his amendment to the Stimulus bill to make 
improvements to the credit and I have decided to join him as a 
cosponsor of S. 253, which seeks to make further improvements.
  The bill I am introducing is different from S. 253 in three main 
ways. First, my bill would improve the home buyer credit using the 2009 
Stimulus bill as a starting point. Second, my bill would increase the 
value of the credit to $15,000, or 10 percent of the home value, 
whichever is less, whereas S. 253 would increase the credit amount 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. Finally, my bill would remove income limitations on the 
credit, whereas S. 253 limits the credit for individuals earning up to 
$125,000, or $250,000 in the case of a joint return.
  I believe it is important for both bills to be pending so that 
additional ideas can be debated. To that end, I look forward to working 
with Senator Isakson to build consensus and support for further 
improvements. As long as forecasts predict that home prices are falling 
and that the economy will remain weak, a large fraction of potential 
homebuyers may choose to remain on the sidelines without a robust tax 
credit in place.
  I urge my colleagues to support this legislation, or the legislation 
introduced by Senator Isakson, to make further improvements to the home 
buyer tax credit.
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