House Democrats Target Aid To Homeowners As Senate Plan Showers Tax Breaks On Businesses [View All]

[Purveyor]

Source: Associated Press

WASHINGTON – Democrats are split over how to respond to the housing crisis, with House leaders focusing on helping homeowners facing foreclosure while the Senate moves to take care of businesses impacted by the subprime crisis.

The Senate could pass its bipartisan business-friendly measure, which showers some $25 billion in tax breaks on home builders and banks, as early as Wednesday. That's also when a key House panel is to consider a rival Democratic plan that instead steers tax breaks toward first-time home-buyers and investors in low-income rental housing.

The emerging rift clouds the prospects for a broader housing rescue plan that would have the government step in and insure $300 billion in restructured loans for homeowners staring at foreclosure. Rep. Barney Frank, D-Mass., the Banking Committee chairman, begins hearings on that measure Wednesday.
The House and Senate will ultimately have to reconcile competing versions of the plan.

House Speaker Nancy Pelosi, D-Calif., has made little secret of her distaste for the Senate's approach. “Hopefully, the balance will swing to being more in favor of the families who are in danger of losing their homes,” she told reporters last week.

The House plan would give first-time homebuyers a 10 percent credit – up to $7,500 – on the purchase of a new home. It is targeted toward lower earners, with those making $70,000 (or $110,000 for a couple) receiving smaller credits.

“We need to provide relief to the buyers and families themselves, not just the banks and builders,” Rep. Charles B. Rangel, D-N.Y., the Ways and Means Committee chairman, said Tuesday. “The House bill puts families first – offering a refundable tax credit to first-time homebuyers, essentially a zero-interest loan to help defray the cost of purchasing a house.”

Read more: http://www.signonsandiego.com/news/nation/20080408-1151-congress-housing.html