[Congressional Record (Bound Edition), Volume 154 (2008), Part 4]
[Senate]
[Pages 5318-5319]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                HOUSING

  Mr. BAUCUS. Mr. President, a Chinese proverb asks: How can one beam 
alone support a house?
  The same can be asked about the housing market. The housing market 
includes homeowners, home buyers, and homebuilders alike. To support 
the entire housing market, one does best to support each of its several 
parts.
  That is why I worked with my colleague, Senator Chuck Grassley, and 
other members of the Finance Committee to craft the housing tax 
provisions in the pending substitute amendment. These provisions 
address the several parts of the housing market. Our legislation would 
help homeowners, home buyers, and homebuilders. In so doing, our 
legislation would provide sounder support for the market as a whole. In 
today's economy, many homeowners are having difficulty paying the 
mortgage. About 4 percent of first-mortgage debt is delinquent. Another 
1 percent is in default.
  Last year, nearly 1.5 million homeowners defaulted on their first 
mortgages. That is up from 900,000 in the year before and 800,000 in 
the year before that. Defaults and foreclosures have contributed to the 
decline in housing prices. They have destroyed more than $2.5 trillion 
in household net worth in the space of a year.
  Our legislation would help homeowners with a property tax deduction 
available for people who do not itemize their tax deductions. This new 
deduction would alleviate some of the burden of local property taxes, 
at a time when homeowners are struggling to pay their mortgages.
  This new property tax deduction would provide a standard deduction 
for up to $500 for single filers and $1,000 for joint filers. It would 
be available to the more than 28 million families who pay property 
taxes but who do not itemize their deductions. These are middle- and 
low-income households. These are some of the same families in the 
housing market who most need relief.
  For home buyers, our legislation includes a home buyer credit and 
mortgage revenue bonds. The home buyer tax credit provides a $7,000 tax 
credit for the purchase of a home upon which foreclosure has been 
filed. The tax credit rightfully excludes second-home purchases and 
rental investments. It focuses on the principal residences of 
struggling families.
  By targeting foreclosed properties, our provision would get families 
into vacant homes. By targeting homes that are near foreclosure, our 
credit may steer home buyers to those homes. That may make enough 
difference to help some families to get out of foreclosure and out of 
harsh eviction proceedings.
  Our legislation also includes mortgage revenue bonds. We would 
provide an additional $10 billion of tax-exempt private activity bond 
authority. States could use these bonds to refinance subprime loans, to 
provide mortgages for first-time home buyers, and to provide 
multifamily rental housing.
  This substantial increase for the States comes at a critical time. 
States are directly experiencing the effects of the economic downturn. 
With the financial crisis tightening up lending, this cash can provide 
much needed financing. That financing will once again help low- to 
middle-income households.
  The subprime mortgage crisis and declining housing sales have forced 
many homebuilders to lose money. According to the most recent Labor 
Department report, construction and manufacturing are the hardest hit 
sectors of the economy. Construction shed 51,000 jobs so far this year, 
and manufacturing shed 48,000 jobs so far this year.
  Construction employment alone is down 182,000 jobs since November. It 
is down by 356,000 jobs over last year. Overall, the private sector has 
lost 296,000 jobs over the last 3 months. That is a loss of 97,000 jobs 
a month.
  For homebuilders, our package would allow businesses to carry back 
losses to profitable tax years. That would help the homebuilders hit 
the hardest by the housing market crisis. The pending amendment would 
allow troubled businesses to carry back net operating losses for 4 
years, for tax years 2008 and 2009. That would allow them to receive 
quick tax refunds.
  This tax relief would slow losses. These businesses would then have a 
quick cash infusion to meet payroll and other current expense 
obligations. We hope this relief would encourage these businesses to 
rehire some of those workers who have lost their jobs. This provision 
benefits both employers and employees.
  As well, the net operating loss provisions in the pending amendment 
would allow homebuilders and other distressed businesses to take the 
book benefit of a net operating loss before claiming the amount on 
their tax return. This would help distressed businesses to obtain 
additional financing.
  Now, these provisions alone would clearly not solve the housing 
market woes facing this Nation, but by helping homeowners, home buyers 
and homebuilders, we would take a significant

[[Page 5319]]

step in the right direction. No one piece of legislation can solve all 
of our problems but inaction most certainly will solve none of our 
problems. That is why we must act. We should bring debate to a close. 
We should invoke cloture this afternoon. We should pass this much 
needed tax relief.
  Let's not rely on one beam alone to support an entire structure. 
Let's pass this help for home buyers, homebuilders, and homeowners, and 
let's provide this much needed support for the housing market.

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