[Congressional Record Volume 155, Number 131 (Wednesday, September 16, 2009)]
[Senate]
[Pages S9439-S9440]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CARDIN (for himself, Mr. Ensign, Mr. Reid, Mr. Isakson, 
        and Ms. Stabenow):
  S. 1678. A bill to amend the Internal Revenue Code of 1986 to extend 
the first-time homebuyer tax credit, and for other purposes; to the 
Committee on Finance.
  Mr. CARDIN. Mr. President, I rise to introduce a bill to extend the 
current first-time home buyers' tax credit for 6 months to June 1, 
2010. I am pleased to have Senators Ensign, Harry Reid, Isakson, and 
Stabenow as original cosponsors of this legislation.
  I know my colleagues remember that it was housing that led us into 
this recession. Remember how in the housing market the values fell, 
there were mortgage foreclosures, and housing starts stopped. Well, 
housing can help lead us out of this recession.
  The Housing and Economic Recovery Act of 2008 initially established a 
credit at $7,500, and that was repayable over 15 years. The American 
Recovery and Reinvestment Act of 2009 increased that credit to $8,000, 
dropped the repayment obligation, and extended the credit to December 
1, 2009.
  The legislation I am introducing today with my colleagues Senators 
Ensign, Harry Reid, Isakson, and Stabenow would change the expiration 
date from December 1, 2009, to June 1, 2010. I know my colleagues 
understand the time delay here which requires that the houses go 
through settlement in order to qualify for the credit. So I think it is 
important that we act timely, not waiting until November 1, but to try 
to get this bill moving quickly. It has been an incredibly important 
tool to help the housing market to help restore our economy.

  This is a direct extension, a clean extension. It basically extends 
it for 6 months. I have talked with my colleagues about ways this 
credit perhaps could be improved, and I know we will get into that 
debate. But I want to make sure we don't have a lapse in this credit 
being available to help first-time home buyers. It has been very 
valuable. As we work to perhaps modify this proposal, let us make sure 
we continue it so as we are fighting to get our economy back on track, 
we don't regress and lose this tool that is available to help the 
housing market.
  The credit has been a huge success in helping to revive a depressed 
housing market. As of March 6, 2009, the Treasury inspector general for 
tax administration identified nearly 530,000 returns claiming more than 
$3.9 billion in the first-time homeowners' tax credit.
  As many as 40 percent of all home buyers this year will qualify for a 
credit. That tells us this credit is working. It is getting people who 
have never owned a home before into the home-buying market, knowing 
that the Federal Government is providing an incentive. It is estimated 
the credit is directly responsible for roughly 300,000 to 400,000 
purchases this year. According to the National Association of Realtors, 
those additional sales have pumped approximately $22 billion into the 
economy. This is a modest tax incentive to help an industry that is 
vital to our economy, that produces an incredible amount of economic 
activity and jobs. Mortgage applications increased nearly 10 percent 
for the week ending September 3 from late August, the largest gain 
since early April.
  Economists such as Mark Zandi of Moody's and James Glassman of 
JPMorgan Chase support extending this credit. While there are signs 
that the housing market is stabilizing, we are not out of the woods 
yet. The industry and part of the economy still needs help. I have 
talked to many of the realtors in my community in Maryland and they 
tell me the inventory of property on the market is at high levels. 
There is a lot of inventory out there. More people are wanting to sell 
than people willing to buy. The number of new housing starts for 
residential homes is at a very low level. Each

[[Page S9440]]

housing start creates jobs. It creates jobs in the material industry. 
It creates all types of ripples in our economy. So getting the housing 
market back on track will not only help in getting more homeowners into 
homes and helping the economy that direct way, it also creates the jobs 
and maintains the jobs of those who supply the network which will 
create new housing stock for America.
  Dean Baker, the codirector for the Center for Economic and Policy 
Research, notes that price declines could resume later this fall. I 
quote:

       The uptick in sales driven by the credit has led to a 
     substantial increase in the number of homes offered for sale 
     at just the time that the boost from the credit is dwindling. 
     The inventory will also be a much larger drag in the slow-
     selling winter months. . . .

  So we now have a large inventory, and if the credit is not available, 
I think it will have a very negative impact on the ability to continue 
housing sales at a level of recovery for our economy.
  Extending the credit is prudent and a fiscally responsible measure. 
It provides the help. We know it works. We know what has happened. We 
know we are still in difficult times. It is not the time to eliminate 
this tool that we have available. That is why I am recommending an 
extension, not a permanent extension, because we want this credit to be 
available to get us out of our current economic problems. We know we 
still need it. A 6-month extension is the minimum we should do. At the 
same time, we should look at other ways to improve and help the housing 
industry and to help the recovery of our Nation.
  I appreciate my colleagues who have joined me in this effort. I hope 
my colleagues in this body will help us with moving this legislation as 
promptly as possible.

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