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Wednesday, April 16, 2008

File this away under "Why Am I Not Surprised"?

Posted by Jill | 5:38 AM

So much for the Foreclosure Prevention Act being about helping homeowners in danger of losing their homes:

In the Senate bill, the nation’s biggest home builders, some now on the verge of bankruptcy, won a provision that would let them claim millions in tax refunds by charging their current losses against the huge profits they made three or four years ago. Other struggling industries would benefit from this provision.

“This is our biggest legislative effort since the Tax Reform Act of 1986,” said Jerry M. Howard, chief executive of the National Association of Home Builders. Hundreds of the association’s members flooded the district offices of representatives and senators while they were home for the spring recess last month.

Supporters of the bill, including Senator Max Baucus, Democrat of Montana and the chairman of the Senate Finance Committee, say it represents sound tax policy carefully focused to help stimulate the lagging economy. But the White House opposes the Senate bill, and Democratic leaders in the House not only have promised to provide more relief for individual homeowners, but have also dropped the corporate tax provisions from their version.

Downtrodden automakers — Ford and General Motors — were especially dogged in securing a tax break that would let them collect alternative minimum tax credits, also known as the A.M.T., that would otherwise be out of reach because they did not pay enough taxes in recent years to claim a rebate.

If the provision becomes law, it could mean checks up to $40 million for the car manufacturers, as long as the companies had made investments in plant or equipment in that amount.

A Ford spokesman, Mike Moran, said he was aware that Ford would benefit from the tax credit in the bill passed by the Senate. But Mr. Moran said that the credit applied to a range of industries, not just automakers. A General Motors spokesman could not be reached.

Domestic airlines and manufacturers other than automakers would be eligible to claim the A.M.T. break as well. One lobbyist said that the companies that had sought the tax breaks in meetings with lawmakers included Ford, General Motors, American Airlines, Northwest Airlines and Goodyear Tire and Rubber.

Companies could claim only one of the new tax breaks, which in all, are expected to cost $6 billion through 2018. The jockeying among industry groups, including Realtors, home builders and bankers, is certain to intensify in coming weeks as lawmakers move to reconcile the Senate bill with a more ambitious package of housing legislation now under way in the House.

Lawmakers on the tax-writing House Ways and Means Committee have omitted the corporate tax cuts from their version of the bill in favor of tax breaks for first-time home buyers and developers of low-income rental housing, and more aid for owners facing foreclosure.

Congressional Democrats are also hearing from consumer advocates and other groups who say that the Senate bill does little to help Americans in danger of losing their homes to foreclosure.

“The Senate legislation gave corporations and Wall Street billions in tax breaks,” Terence M. O’Sullivan, the president of the Laborers International Union of North America, said at a news conference on Tuesday to denounce the bill.

“Tax breaks for corporate home builders won’t help stabilize the housing market, won’t create jobs and won’t prevent a single foreclosure,” he continued. “If anything, this multibillion-dollar windfall will make things worse.”

This is why, when those envelopes from the DNC, DSCC, and DCCC come in the mail, I throw them away, and why I will only support certain specific individual candidates, most of whom are "insurgent" candidates who seek to throw these bums out. It's because I am tired of supporting a party apparatus that claims to be the "about the people" party and then does its corporate masters' bidding when legislation time rolls around. Piss, leg, raining, etc.

Frankly, I'm not in favor of bailing out people who were too stupid or too careless to understand what they were signing when they agreed to borrow hundreds of thousands of dollars, let alone the flippers and speculators. [curmudgeon on] I didn't have a house until I was 40 because we just plain couldn't afford the down payment. And I made damn sure to crunch the numbers, make sure we could make the payments, and understand exactly what we were signing when we finally bought the house we live in now. [curmudgeon off] There's a legitimate fear that if millions of people are foreclosed out of their homes, the ripple effect, not just to home values (which really DO need to come down; there is no reason why a POS cape cod like mine should sell for almost a half-million dollars), but to entire neighborhoods in danger of becoming a haven for squatters and plunderers, will cause the economy to collapse, at least as much as allowing Bear Stearns to fail would have.

There's no legitimate way to help the person who bought an $800,000 home on a $60,000 income. That person is going to have to learn a very hard lesson. But there has to be a way to craft legislation to truly help those who were baited-and-switched by mortgage lenders who showed up at closing with a different mortgage than the one agreed to, and those who are being foreclosed because they lost their job or are faced with impossible medical bills. The Senate should take the time to craft legislation to do that, not to use American homeowners as cover to shovel yet more taxpayer cash into the pockets of their campaign contributors.

Labels: housing bubble, Senate

1 comments

1 Comments:

Anonymous said...

I agree with you. There may be a way to craft legislation that would help homeowners who are really facing financial hardships and foreclosure.

But rewarding corporations with tax breaks is simply not the answer. In fact, it's significantly worse than rewarding greedy real estate flippers and people who lied on mortgage applications.

This bill is corporate welfare for the sake of corporate welfare. It's designed to help corporations prevent suffering financial losses due to the high foreclosure rates. Helping homeowners actually stop foreclosure is the last thing this bill will do.

4/16/08, 12:01 PM