Obama backs extension of tax credit

Bipartisan support builds for first-time homebuyer program

Inman News

White House spokesman Robert Gibbs today confirmed that President Obama supports an extension of the first-time homebuyer tax credit, along with prolonging jobless benefits and health care subsidies for unemployed workers.

Briefing reporters, Gibbs said the measures don’t amount to a second stimulus plan.

Evidence of bipartisan support in the Senate for extending the first-time homebuyer tax credit was also on display Sunday on ABC’s "This Week," with guests Sen. Charles Schumer, D-N.Y., and Sen. John Cornyn, R-Texas, finding common ground on the issue.

Host George Stephanopoulos’ first guest was former Federal Reserve Chairman Alan Greenspan, who argued against a new round of government stimulus spending.

Only 40 percent of the existing stimulus package has been implemented, Greenspan said, and there is "considerable debate" among economists about its effectiveness.

Many lawmakers — particularly Republicans — are concerned about the debt the government has taken on to boost the economy. But Cornyn said he and Schumer agree on renewing the $8,000 first-time homebuyer tax credit, which expires Nov. 30, along with extending unemployment and health care benefits for unemployed workers.

There are a dozen or so pending bills that would extend or even expand the tax credit.

Earlier this year, former real estate broker Sen. Johnny Isakson, R-Ga., introduced S 1230, which would nearly double the tax credit’s ceiling to $15,000 and expand the pool of those eligible to claim it by lifting first-time homebuyer and income restrictions. When Isakson introduced a similar bill last year, the Congressional Budget Office estimated it would cost $34.2 billion.

Isakson has since endorsed a compromise bill, S 1678, that would simply extend the existing tax credit to June 1, 2010.

Isakson’s argument is "that the housing inventories, or excess housing inventories, are what are dampening the recovery," Cornyn said. "And I think he’s right."

Schumer said he’d support extending the credit, as it’s "helped get the housing market out of the severe depression it was in. It’s getting a little better, (but) has to go more."

Former real estate broker and NBC "Today" show contributor Barbara Corcoran last week advised homebuyers not to rush to beat the tax credit’s expiration date, saying she "fully expects" lawmakers to extend it (see story).

 

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